Improving Work Conditions in a Global Supply Chain
Key Insights for Managers
This study compares two Nike apparel suppliers in Mexico that had the same overall code-of-conduct compliance (“Plant A” and “Plant B”). More than 90 interviews conducted by Richard M. Locke and Monica Romis revealed important differences between them. Plant A had worse policy documentation, but, from implementing lean manufacturing, increased worker autonomy, empowerment, and productivity, led to higher wages and better overtime practices. Plant B had better policy documentation but management emphasized worker monitoring and control to boost productivity and cut costs, which led to lower wages and overtime practices.
This study is part of a larger body of Nike audit research which, using a larger sample of global audit data of 800 suppliers in 51 countries, finds that stronger national laws, smaller factories, and stronger relationships with Nike were all positively associated with better factory audit compliance.