Dissertation - Victoria Esquilar.pdf - Sistema de Bibliotecas FGV

FUNDACAO GETULIO VARGAS

ESCOLA DE ADMINISTRACAO DE EMPRESAS DE SAO PAULO

VICTORIA BRUNHARA ESQUILAR

MADE BY SLAVE LABOR:

Are apparel supply chains transparently accepting modern slavery?

SAO PAULO

2021




Dissertacao de mestrado apresentada a Escola de

Administracao de Empresas de Sao Paulo da

Fundacao Getulio Vargas como requisito para

obtencao do titulo de Mestre em Administracao

de Empresas.

Linha de pesquisa: Gestão de Operações e

Sustentabilidade.

Orientador: Prof. Ely Laureano Paiva, Dr.

Coorientador: Prof. Chen Yen-Tsang, Dr.

SAO PAULO

2021

Esquilar, Victoria Brunhara.

Made by slave labor: are apparel supply chains transparently accepting modern slavery? / Victoria Brunhara Esquilar. - 2021.

76 f.

Orientador: Ely Laureano Paiva. Co-orientador: Yen-Tsang Chen.

Dissertação (mestrado CMAE) – Fundação Getulio Vargas, Escola de Administração de Empresas de São Paulo.

1. Logística empresarial. 2. Trabalho escravo. 3. Responsabilidade social da empresa. 4. Indústria têxtil. I. Paiva, Ely Laureano. II. Chen, Yen-Tsang. III. Dissertação (mestrado CMAE) – Escola de Administração de Empresas de São Paulo. IV. Fundação Getulio Vargas. V. Título.

CDU 658.86/.87

Ficha Catalográfica elaborada por: Isabele Oliveira dos Santos Garcia CRB SP-010191/O

Biblioteca Karl A. Boedecker da Fundação Getulio Vargas - SP




Dissertacao de mestrado apresentada a Escola de

Administracao de Empresas de Sao Paulo da

Fundacao Getulio Vargas como requisito para

obtencao do titulo de Mestre em Administracao

de Empresas.

Linha de pesquisa: Gestão de Operações e

Sustentabilidade.

Data de avaliação: 23/09/2021

Banca de avaliação:

_____________________________________

Prof. Ely Laureano Paiva, Dr. (Orientador)

FGV/EAESP

_____________________________________

Prof. Chen Yen-Tsang, Dr. (Coorientador)

NEOMA Business School

_____________________________________

Prof. Leonardo Marques, Dr.

COPPEAD/ UFRJ

_____________________________________

Prof. Paulo Roberto Arvate, Dr.

FGV/EAESP

To the people who are on modern slavery conditions.

AGRADECIMENTOS

A minha jornada no mestrado foi de muito aprendizado, não só acadêmico, mas também de

vida. Acredito que me desenvolvi muito nos últimos anos e devo isto à contribuição de pessoas

muito generosas.

Agradeço aos meus pais, Marli e Carlos, por todo o apoio incentivo nesta etapa e em toda

a minha vida. Vocês foram extensa fonte de inspiração para que conseguisse trilhar este caminho.

Agradeço também a minha avó, Aparecida, pelo apoio e por tentar entender as minhas ausências.

Meus sinceros agradecimentos ao meu orientador, Professor Ely Laureano Paiva, que

acreditou em mim e teve bastante paciência em me ajudar a manter o foco. Agradeço também por

compartilhar comigo um pouco do seu extenso conhecimento, pelas ideias, reflexões e

contribuições que formaram a essência deste trabalho. Espero ter conseguido corresponder, muito

obrigada!

Ao Professor Chen Yen-Tsang, que aceitou colaborar com este trabalho como coorientador

e foi peça chave para a conclusão. Muito obrigada pelas contribuições e pelo empenho em me

ajudar no design do experimento, sua ajuda foi essencial para que eu conseguisse seguir com a

metodologia escolhida. Também contribuíram com a metodologia deste trabalho, e com o meu

desenvolvimento durante o mestrado, as professoras Barbara Flynn, Priscila Miguel, Susana

Pereira, e Rosana Tondolo.

Aos membros da banca avaliadora, professores Leonardo Marques e Paulo Arvate,

agradeço o tempo e dedicação em contribuir com o meu trabalho. Agradeço ao Leonardo, também,

pelas colaborações na banca de qualificação e na coleta de dados.

A minha mentora, Lucimara Ferreira, que me acompanhou por momentos decisivos neste

processo. Sempre me ajudando a manter o foco no presente, enquanto pensávamos os próximos

passos.

Aos meus colegas e amigos da FGV, Cecilia, Cristina, Deborah, Fernando e Kenyth,

compartilhar essa caminhada com vocês foi muito prazeroso. Cada disciplina, conversa e até os

cafezinhos me ajudaram a entender melhor o processo acadêmico, e expandir a minha visão de

mundo.

Agradeço aos meus amigos que me apoiaram e incentivaram nessa jornada, além de

entenderem as ausências necessárias em alguns momentos. Em especial, agradeço a Raphaela e a

Renata, que contribuíram diretamente para a realização deste trabalho com comentários e ajuda na

coleta de dados e entrevistas.

Não poderia fechar os agradecimentos sem falar dos respondentes e entrevistados. A

realização desta pesquisa só foi possível graças à colaboração deles. Essas pessoas compartilharam

do seu tempo e conhecimento para que este estudo pudesse ser concluído, a elas o meu muito

obrigada!

Nota: O presente trabalho foi realizado com apoio do CNPq, Conselho Nacional de

Desenvolvimento Científico e Tecnológico – Brasil.

ABSTRACT

Modern slavery occurrence in supply chains is intrinsically related to purchase functions.

Nevertheless, literatures of modern slavery in supply chains and socially responsible sourcing have

not explored the link between supplier selection and potential presence of modern slavery in supply

chains. In an attempt to fill this gap, this research has focused on Brazilian textile industry. A

controlled experiment using discrete choice analysis, scenario-based role playing, and priming was

conducted with 82 working professionals experienced in supplier selection for fashion retailers.

Results provide strong evidence of traceability relevance to supplier selection, yielding to

evidence of managerial and practice incorporation of transparency agenda. Both manipulation and

control groups ranked traceability of finished product and fabric as the two most important

attributes, accounting respectively for 48% and 22% in manipulation group and 44% and 24% in

control group.

Keywords: Modern slavery; supply chain; socially responsible sourcing; discrete choice

experiment

RESUMO

A ocorrência da escravagismo moderno em cadeias de suprimentos está intrinsecamente

relacionada às funções de compra. No entanto, a literatura de escravagismo moderno em cadeias

de suprimentos e de seleção de fornecedores socialmente responsável não exploram a ligação entre

a seleção de fornecedores e a presença potencial de escravagismo moderno em cadeias de

suprimentos. Na tentativa de preencher essa lacuna, esta pesquisa teve como foco a indústria têxtil

brasileira. Um experimento controlado baseado em vinheta, priming, e análise de escolha discreta

foi conduzido com 82 profissionais experientes em seleção de fornecedores para varejistas de

moda.

Os resultados fornecem fortes evidências da relevância da rastreabilidade para a seleção de

fornecedores, proporcionando evidências da incorporação gerencial e prática da agenda de

transparência. Os grupos de manipulação e controle classificaram a rastreabilidade do produto

acabado e do tecido como os dois atributos mais importantes, respondendo respectivamente por

48% e 22% no grupo de manipulação e 44% e 24% no grupo de controle.

Palavras-chave: Escravagismo moderno; Cadeias de suprimentos; Seleção de fornecedores

socialmente responsável; Experimento de escolha discreta

LIST OF TABLES

Table 1 – Level of balance ............................................................................................................ 33

Table 2 – Sample description ........................................................................................................ 36

Table 3 – Sample working experience .......................................................................................... 36

Table 4 – Descriptive results for manipulation checks ................................................................. 37

Table 5 – ANOVA of manipulation checks .................................................................................. 37

Table 6 – Attributes' levels codefication ....................................................................................... 38

Table 7 – Discrete choice .............................................................................................................. 40

Table 8 – Attributes’ importance .................................................................................................. 41

Table 9 – Attribute levels utilities ................................................................................................. 43

Table 10 – ABVTEX conditional logistic regression ................................................................... 47

LIST OF FIGURES

Figure 1 - Finished product traceability - Manipulation group .................................................... 44

Figure 2 - Finished product traceability - Control group .............................................................. 44

Figure 3 - Fabric traceability - Manipulation group ..................................................................... 45

Figure 4 - Fabric traceability - Control group .............................................................................. 45

TABLE OF CONTENTS

1. INTRODUCTION ................................................................................................................... 12

2. THEORETICAL FRAMEWORK ......................................................................................... 13

2.1. Modern slavery .................................................................................................................. 13

2.1.1. Social issues and modern slavery........................................................................ 15

2.1.2. Modern slavery in supply chains ........................................................................ 16

2.1.3. Socially responsible sourcing ............................................................................. 17

2.1.4. Detection and remediation .................................................................................. 17

2.2. Transparency ...................................................................................................................... 19

2.2.1. Reputational Risk ................................................................................................ 20

2.2.2. Conflict of interest .............................................................................................. 22

2.2.3. Collaboration and contract duration .................................................................... 23

2.2.4. Complexity and distance ..................................................................................... 23

2.2.5. Legislation ........................................................................................................... 24

2.2.6. Critiques .............................................................................................................. 26

2.3. Hypothesis development .................................................................................................... 27

3. METHOD ................................................................................................................................. 28

3.1. Experimental vignette methodology .................................................................................. 28

3.2. Manipulation ...................................................................................................................... 29

3.3. Discrete choice experiment ................................................................................................ 30

3.3.1. Interviews with specialists .................................................................................. 30

3.3.2. Choice set design ................................................................................................ 32

3.4. Dependent variable ............................................................................................................ 33

3.5. Population and sample ....................................................................................................... 34

3.6. Data collection ................................................................................................................... 35

4. RESULTS AND DISCUSSIONS ............................................................................................ 35

4.1. Sample description ............................................................................................................. 35

4.2. Reliability ........................................................................................................................... 36

4.3. Manipulation checks .......................................................................................................... 37

4.4. Discrete choice analysis ..................................................................................................... 38

5. CONCLUSIONS ...................................................................................................................... 48

5.1. Limitations and future research ......................................................................................... 48

REFERENCES ............................................................................................................................ 50

APPENDICES .............................................................................................................................. 61

Appendix A – Research protocol (Portuguese) ........................................................................ 61

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1. INTRODUCTION

Until the late 1990s Nike Inc. [Nike] has had many issues over its labor practices and several

allegations of modern slavery, child labor and sweatshop abuses. It got so prominent that Philip H.

Knight, Nike's CEO said, “The Nike product has become synonymous with slave wages, forced

overtime and arbitrary abuse” (The Washington Post, 1998). This statement occurred in a speech

introducing some of Nike’s new initiatives on labor conditions, as a response to human rights

campaigners, public shaming, and consumer pressure.

From 1998 on, Nike has developed various initiatives to tackle social issues in its supply

chain. One of Nike’s most market change initiative occurred fifteen years ago. A turnover on the

brand’s image begun in 2005, when Nike took the lead of transparency and disclosed the list of its

global contract factories. From that time on, Nike became a case of success in both transparency

and reputation management. That transparency leadership brought to Nike media, consumer, and

academic attention. Transparency was said to improve corporate conduct and pressure competitors

to do the same (Doorey, 2011), in a belief that consumers care about ethics, environmental impact,

quality and safety in the supply chains of the products they buy (New, 2010).

Fifteen years have passed, and Nike is, still, facing allegations against working conditions

in its supply chain. China has been accused of detaining more than a million Uighurs, a Muslim

minority group, in internment camps defined by the government as “re-education camps”. One of

the allegations is of slave labor in Xinjiang, China. Xinjiang produces 80% of China’s cotton,

which is about 20% of the world’s supply. Because of the vast cotton production in the region,

activist campaign is focusing on clothing brands. Nike is one of the companies accused of having

ties with Xinjiang’s suppliers. While the company acknowledges the issue and reports to be

working with stakeholders and other brands to address it, US Congress is considering legislations

to ban imports from the region (British Broadcasting Corporation - BBC, 2020).

As potential presence of modern slavery in buyer firm’s supply chains is, commonly, linked

to its suppliers (New, 2015), thus is linked to procurement function and supplier selection (Roberts,

2003). Kim, Coliccha and Menachof (2018) and Zorzini, Hendry Anisul and Huq (2015)

acknowlwdge that textile and agricultural sectors received the broadest academic scrutiny.

Probably due to an intensive labor nature of those industries (Gold, Trautrims and Trodd, 2015;

Zorzini et al., 2015). As some fabrics used in textile production, such as cotton, have its provenance

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in agriculture, textile sector face potential modern slavery occurrence in many tiers upstream in its

supply chains.

The following research question guided this dissertation: What is the relative importance

of traceability in supplier selection, considering a potential presence of modern slavery?

To answer this question, I established three research objectives:

1. To understand the relative importance of the attributes in supplier selection of textile

focal firms.

2. To explore the influence of potential presence of modern slavery in supply chains

to buyers’ preference among supplier criteria.

3. To measure the impact of suppliers’ willingness to provide traceability to buyers’

decision.

To address the research questions and objectives a controlled experiment using discrete choice

analysis, scenario-based role playing, and priming will be conducted.

2. THEORETICAL FRAMEWORK

2.1. Modern slavery

Servitude, trafficking, forced labor and slavery are concepts that sometimes are used

interchangeably, which creates a “multifaced continuum” of exploitation forms (Quirk, 2006, p.

577). The term modern slavery is the most commonly used in management research (Caruana,

Crane, Gold and LeBaron, 2020). Modern slavery is used to describe a wide range of exploitative

practices (Gold et al., 2015; New, 2015).

Caruana et al. (2020) built on the International Labor Organization & Walk Free Foundation

(2017, p. 9) definition of modern slavery as “situations of exploitation that a person cannot refuse

or leave because of threats, violence, coercion, deception, and/or abuse of power”. However, the

authors do not include forced marriage and acknowledge economic coercion as an important factor

shaping modern slavery. In the supply chain management literature the term is defined as the

“exploitation of a person who is deprived of individual liberty anywhere along the supply chain,

from raw material extraction to the final customer, for the purpose of service provision or

production” (Gold et al., 2015, p. 487).

Gold et al. (2015, pp. 488 - 489) points out several signals that serve as a warning system

for supply chain managers, certification bodies and auditing personnel of the risk of modern slavery

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occurrence (i.e. low worker protection due to inadequate laws, enforcement, and government

accountability; high percentage of working poor; lack of other employment opportunities and

domination of labor market by one or a few employers; agent-based recruitment of laborer; social

acceptance of worker exploitation; widespread discrimination against certain groups of workers;

high percentage of migrants or minorities in the workforce; location of production activities in

conflict zones; and high proportion of low skilled labor in industries such as raw material extracting

and/or processing).

Slavery legal abolition in the nineteenth and twentieth centuries shifted the practice from

legal and officially approved to be criminalized and marginalized to the informal economy (Quirk,

2006). Thereby, contemporary anti-slavery attempts have a series of conceptual and practical

issues, such as categorizing slavery (Quirk, 2006), understanding processes, conditions and

dynamics that generate modern slavery (Barrientos et al., 2013), detecting and remediating (Gold

et al., 2015; Stevenson & Cole, 2018).

A seminal work establishing a connection between modern slavery and business is authored

by Crane (2013). The author proposes the “theory of slavery as a management practice”. Crane

build on the four conditions defined by the nongovernmental organization Anti-Slavery

International to propose that “under modern slavery people are (1) forced to work through threat;

(2) owned or controlled by an “employer,” typically through mental, physical, or threatened abuse;

(3) dehumanized and treated as a commodity; and (4) physically constrained or restricted in

freedom of movement.” Due to its focus on the business side, the author also includes a fifth

dimension of economic exploitation – “(5) subject to economic exploitation through

underpayment.” In essence, “slavery is an attempt to underprice a key resource (labor) through

illegitimate means” (Crane, 2013, p. 51).

Crane (2013) develops his theory based on the institutional theory and capabilities

literature. “Institutional deflection” (Crane, 2013, p. 51) relates to how enterprises, through

illegitimate practices, succeed in achieve underprice labor, contradicting isomorphism. This

deflection depends on organization’s competences to influence and exploit conditions that

perpetuates slavery. Those conditions are related to industry, socioeconomic, geographic, cultural

and regulatory contexts. Thus, modern slavery as a management practice is more likely to occur in

high labor intensity and low technological industries; socioeconomic contexts with high poverty

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and high unemployment rates; physical, political, or psychological distant geographic contexts;

and regulatory contexts of weak public governance and private or civil regulation.

Even though it’s focuses on the organizations that deploy slavery and its environments, the

author acknowledges the link of supply chains in the issue. Crane posits that “a conducive industry

context (namely, high labor intensity, low value distribution, high elasticity of demand, low

industry legitimacy, and high regional clustering) will lead to a greater likelihood that enterprises

will adopt slavery” following by “this effect will be moderated by supply chain interventions”

(Crane, 2013, p. 55). According to the author, those supply chain interventions can damper or

amplify the effect of industry context. While private regulation and affordable credit can damper,

contracting unregulated or informal suppliers and forcing prices down can amplify it.

2.1.1. Social issues and modern slavery

Modern slavery in supply chains has been discussed by sustainable supply chain

management (Miemczyk & Luzzini, 2019), socially sustainable supply chain (Croom, Vidal,

Spetic, Marshall, McCarthy, 2018), social issues (Yawar & Seuring, 2017), responsible sourcing

(Shao et al., 2020) and supply chain risk management (Pournader, Kach, Talluri, 2020). Along with

many other social issues such as poor working conditions (Lam, 2018), child labor (Cho, Fang,

Tayur, Xu, 2019), health and safety (Klassen & Vereecke, 2012), social inclusion (German,

Bonanno, Foster, Cotula, 2020) and gender inequalities (Maertens & Swinnen, 2012). However,

New (2015) dedicates his paper to discuss differences between CSR-related issues and modern

slavery, claiming that firm’s approaches to CRS-related issues may foster modern slavery. The

issue is different due to its hidden and criminal nature along with its dependency on third party

labor agencies (Crane, LeBaron, Allain, Behbahani, 2019; New, 2015; Stevenson & Cole, 2018).

According to the authors, modern slavery in supply chains should be tackled separately. Also, “[the

supply chain management literature] is predicated on understanding formal, relatively transparent,

product supply chains, which means that much of the extant theory is limited in its ability to

adequately conceptualize modern slavery issues” (Caruana et al., 2020, p. 15).

One example of the potential negative effects of treating modern slavery as an CRS-related

problem is acknowledged by LeBaron and Rühmkorf in their study comparing two home state

regulations, the UK Bribery Act and Modern Slavery Act (2017, p. 15):

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We find that legislation that creates criminal corporate liability appears to spur deeper

changes to corporate strategy and argue that in the case of the Modern Slavery Act, the

triumph of voluntary reporting over more stringent public [labor] standards seems to have

undermined the effectiveness of recent governance initiatives to address forced [labor] in

global supply chains.

Caruana et al. (2020) alert for the two sides of the distinctiveness of modern slavery. In one

stream, scholars treat modern slavery along with other social issues, thus, disregarding any critical

difference and applying the usual tools to investigate it. In the other stream, scholars overemphasize

the uniqueness of the problem and refute all the knowledge that already exists about supply chain

irresponsibility, poor working conditions, and human right abuses. This research attempt to

consider both sides of the particularity of modern slavery, while focusing only on this issue, it

drawn on knowledge developed by sustainable supply chain management.

2.1.2. Modern slavery in supply chains

There are a broad consensus that modern slavery is widespread however, it is extremely

difficult to verify its scale (New, 2015) as it is a criminal activity outlawed everywhere (Gold et

al., 2015; New, 2015). Sex trafficking and domestic servitude are types of modern slavery that have

had more attention and press coverage (Gold et al., 2015; New, 2015) but by shifting the focus to

forced labor it is necessary to extent attention to supply chains (Gold et al., 2015).

Modern slavery has been neglected by management (Crane, 2013) and supply chain

researchers (Gold et al., 2015; New, 2015). But the lately attention given to the issue by civil

society, policy makers, some business leaders and the general public have prompt scholarly interest

(Caruana et al., 2020). By shedding light on the fact that most slaves are the work force of simple

and non-technological tasks such as agricultural, mining and textile manufacture, Gold et al. (2015)

points out the relationship between modern slavery and supply chain management.

While Gold et al. (2015) were calling future research to conceptualize the challenges of

modern slavery focusing on capabilities and institutional context, Caruana et al. (2020, p. 9) explicit

that little advance was made: “[r]ather than seeing modern slavery as an aberration or an

unexpected feature of global supply chains, SCM research could shift toward identifying the forms,

contexts, and dynamics of SCM in which modern slavery is likely to emerge in more or less

predictable ways”.

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2.1.3. Socially responsible sourcing

For over a decade, scholars have called for research in supplier selection to include

sustainability (Reuter et al., 2010). As sustainability concerns are continuously increasing influence

on corporate strategies (Carter & Rogers, 2008). Pagell, Wu and Wasserman (2010, p. 58) term as

sustainable sourcing “[m]anaging all aspects of the upstream component of the supply chain to

maximize triple bottom line performance.” Even though sustainable sourcing is concerned with

both social, environmental, and economic sustainability, research have emphasized environmental

and economic aspects of sustainability. To field this gap, some research lines focusing on social

aspects have arisen.

Many synonyms are present in the literature, such as “ethical sourcing” (Chen & Slotnick,

2015, 2015; Chen & Lee, 2017; Kim et al., 2018; Kim & Chae, 2021; Roberts, 2003), “purchasing

social responsibility” (Blome & Paulraj, 2013; Carter, 2005; Carter & Jennings, 2004), “socially

responsible purchasing” (Cole & Aitken, 2019, 2020; Saunders, Tate, Zsidisin and Miemczyk,

2019), “socially responsible supplier selection” (Griffis, Autry, Thornton and Brik, 2014;

Thornton, Autry, Gligor and Brik, 2013).

Socially responsible sourcing is defined by Zorzini et al. (2015, p. 60) “as the upstream

social issues within the sustainability literature, where social issues include human rights,

community development and ethical issues but exclude environmental concerns.” Researches in

the field mention modern slavery (Sayed et al., 2020) and forced labor (Roberts, 2003) but any

have centered research context in modern slavery occurrence.

2.1.4. Detection and remediation

“Many firms use the same practices to detect and remediate modern slavery as for other

social issues” (Stevenson & Cole, 2018, p. 81). “Due to a lack of effective indicators, new tools

and indicator systems need to be developed that consider the specific social, cultural and

geographical context of supply regions” (Gold et al., 2015, p. 485). Also, more innovative

approaches are needed due to intermediary labor agencies and the hidden and criminal nature of

modern slavery (Stevenson & Cole, 2018).

Collaboration (Benstead, Hendry and Stevenson, 2018; Stevenson & Cole, 2018) and multi-

stakeholder partnerships (Gold et al., 2015) are pointed out as approaches to detect and remediate

modern slavery in supply chains. Gold et al. (2015) discuss community-centered approaches,

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supplier development initiatives and multi-stakeholder partnerships as possibly effective responses

to detection of slavery. Benstead et al. (2018, p. 2305) studying horizontal collaboration proposes

that:

[I]n the case of modern slavery, new legislation is combined with media scrutiny and NGO

pressure, leading to a collaborative response that generates relational rents in the form of

cost savings, knowledge sharing, new capabilities and enhanced reputation, thus achieving

socially sustainable competitive advantage.

Supply chain auditing is questioned by researchers but, targeted audit, a type of audit that

includes reviewing recruitment process of the entire chain and interviewing workers, can detect

indicators of modern slavery (Benstead, Hendry and Stevenson, 2020). Moreover, NGOs and small

service firms are not exclusive in the intermediary role of audit. Fransen and LeBaron (2019, p.

274) argue that Big Four audit fimrs are “politically active in regulatory policymaking processes”

regarding modern slavery governance.

Mechanisms of private governance that intent do regulate labor issues also have limited

effectiveness. Wilhelm, Kadfak, Bhakoo and Skattang (2020), in their study of private and civil

society responses to the modern slavery scandal in the Thai fishing industry, focus on three

responses: ethical recruitment, worker grievance mechanisms and worker associations. According

to the authors, ethical recruitment in the fishing industry has the barriers of high percentage of

migrant workers and the brokerage fees involved in the process of recruitment and migration.

Workers usually pay a recruitment-fee which mix costs of recruitment and migration, which

is commonly seen as the main cause of modern slavery. Main barrier in the exclusion of

recruitment-fees is that employers and vessel owners are concerned migrant workers might move

to other sectors once they are in Thailand. The ability of worker grievance mechanisms to be

effective is undermined by lack of trust from workers and inability of government and NGOs to

properly handle complaitns. Regulation in Thailand does not allow workers to organise and form

labor uninons, dirgedaring ILO conventions (Wilhelm et al., 2020).

All those particularities form the backdrop of dificulties in remediate and extinguish

modern slavery in supply chains. While Benstead et al. (2020, p. 1) provide evidence of a

remediation process “which includes partnering with a local NGO to empower workers and

collaboratively develop suppliers.” Wilhelm et al.(2020) call for attention to the economic power

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multinational corporations and government from the Global North have in strengthen laws and

regulations regarding modern slavery in sourcing countries.

2.2. Transparency

Literature and regulations are pointing transparency as the mechanism to abolish modern

slavery from supply chains (Benstead et al., 2018; Birkey, Guidry, Islam and Patten, 2018; Flynn,

2020; Gold et al., 2015; Stevenson & Cole, 2018). Most of the argument consist in the assumption

that opening supply chain partners and practices for public scrutiny will encourage buyers to be

more aware of what is going on under their supply chains (Doorey, 2011).

Transparency has been presented as a mechanism to improve business behavior (Doorey,

2011; Gold & Heikkurinen, 2018). Accountability discusses transparency for longer than supply

chain management, Bushman (2004, p. 210) defines as the “widespread availability of firm-specific

information concerning publicly listed firms in the economy to those outside the firm”. Egels-

Zandén, Hulthén and Wulff (2015, p. 95) defines Supply Chain Transparency as “disclosure of

information about supplier names, sustainability conditions at suppliers, and buyers’ purchasing

practices”. While Sodhi and Tang (2019, p. 2946) highlight stakeholder’s interest, “by

transparency, we mean a company disclosing information to consumers, investors, and other

stakeholders about compliance with consumer-expected norms in its supply chain operations and

products”.

The term “supply chain transparency” has often been used interchangeably with other key

concepts: visibility, traceability and disclosure (Montecchi, Plangger and West, 2021). c provides

clear distinction between those terms. Supply chain visibility “refer to managers’ efforts to gather

information about operations upstream and downstream in their supply chains” while

“[T]raceability is a particular aspect of visibility, being the capability of a company for ascertaining

provenance.” “[W]hether or not the company discloses any of this information to the public is a

matter of transparency.”

There are several reasons why a firm may seek to provide transparency. Brand positioning

and marketing, as consumers take greater interest in provenance and authenticity, retailers have

new ways to increase brand value (New, 2010). Trust, providing supply chain transparency can

enhance trust among consumers and investors (MacLean & Rebernak, 2007; Sodhi & Tang, 2019).

20

Stakeholders demands, as consumers, governments and supply chain partners are increasingly

demanding details about the systems and sources under which its goods or services are supplied

(New, 2010). “Companies that fail to open their supply chains to public inspection will find that

others will do it for them” also, social media have changed how activists raise public awareness

(New, 2010, p. 79). Likewise, New (2015) state that forced labor and modern slavery conditions

across supply chains is a problem that calls for more transparency.

2.2.1. Reputational Risk

Risk events may have damaging effects for buyers (Giannakis & Papadopoulos, 2016). The

social, ecological and ethical problems that exist in supply chains may cause buyers to experience

serious losses (Hofmann, Schleper and Blome, 2014). A potential consequence of supplier

sustainability risk for buyers is reputational damage (Foerstl, Reuter, Hartmann and Blome, 2010).

Roehrich, Grosvold and Hoejmose (2014) actually present supplier sustainability risk as a

reputational risk.

Taking the “supplier sustainability risk” perspective (Foerstl et al., 2010; Hajmohammad &

Vachon, 2016; Hofmann et al., 2014), the risk of modern slavery occurrence is connected with

potential stakeholders reactions rather than the occurrence per se. Hofmann et al. (2014, p. 168)

define sustainability-related risk “as a condition or a potentially occurring event that may provoke

harmful stakeholder reactions”. And Hajmohammad and Vachon (2016, p. 48) term supplier

sustainability risk “the potential negative impacts on a buyer from its suppliers’ ecological or social

misconducts”.

From those definitions it is clear that sustainability risks are linked with stakeholders. And

it is not always connected with a fact; a potential event may cause a potential negative impact as

well as an event that has actually happened in a supplier might not cause negative impact for the

buyer. Hajmohammad and Vachon (2016, p. 50) go forward in explaining the potential event as

“cumulative by nature - it is a sustainability-related supplier misconduct (event 1) detected by

concerned stakeholders (event 2) who decide to communicate it broadly (event 3)”. Reputational

risk is not only concerned with suppliers but also with supply chain partners (Fracarolli Nunes. Lee

Park and Paiva, 2020; Villena & Gioia, 2018; Wilhelm, Blome, Bhakoo and Pauraj, 2016).

Likewise, there is an assumption in the modern slavery literature that, firms face

reputational risk when modern slavery practices are found in its supply chains (Benstead et al.,

21

2018; Cole & Aitken, 2019; Flynn, 2020; Gold et al., 2015; New, 2015; Stevenson & Cole, 2018).

Reputational risk of modern slavery occurrence is being presented by scholars under various forms

of justification for a slavery free supply chain:

1. Reputational threats such as supermarkets Carrefour, Tesco and Walmart selling prawns

produced under modern slavery conditions (Gold et al., 2015);

2. Relational rents gains generated through horizontal collaboration in response to modern

slavery legislation (Benstead et al., 2018);

3. Demonstrations of goal congruence and reduction of reputational risk when engaging in

socially responsible purchasing (Cole & Aitken, 2019);

4. Improvement of social and financial performance (Shafiq, Ahmed and Mahmoodi, 2020);

5.Improvement of training and worker education (Huq, Chowdhury and Anisul, 2016).

The optimistic view of the reputational risk expected that stakeholder’s pressure would

incentivize firms to ensure that modern slavery did not occur in its supply chains. Crane (2013)

proposes that weak governance and low attention to slavery lead to a greater likelihood of modern

slavery occurrence, moderated by civil or private regulation. Likewise, Gold et at. (2015) state that

companies will stop neglecting modern slavery as soon as civil society and new legislation impose

litigation and reputational risks. Barrientos (2013) argue for extended liability across global value

chains, and Shao, Ryan and Sun (2020, p. 23), in their study of responsible sourcing below

asymmetric information, argue that “an alternative approach that government agencies and NGOs

could take to encourage more socially responsible sourcing, that is, in addition to promoting

socially conscious consumption among consumers, these organizations could facilitate the process

of supplier disclosure […]”.

Brands being pushed towards assuming responsibility for what is happening in their supply

chains can put reputation at stake (Gold & Heikkurinen, 2018). Caruana et. al (2020) discusses the

potential drawback of the “business case” for socially responsible behavior that can lead to

overlook modern slavery in terms of a “mere” reputational risk. The reputational risk of modern

slavery occurrence leading to stakeholders’ reactions is being taken for granted.

In the modern slavery literature on sustainable supply chain management, ensuring a

slavery-free supply chain also is discussed under the paradigm of profit maximization (Gold et al.,

2015; Stevenson & Cole, 2018). The investments in securing working conditions trade-off against

22

reputational and litigation risks (Gold et al., 2015). Likewise, Stevenson and Cole (2018, p. 94)

when discussing transparency reports consider that, in a cynical view, firms “[…] need to trade off

the potential reputation and competitive gains from being more transparent than the competition,

against the reputational risk should their statement be falsified or against the potential loss of

competitive advantage from information leakage”.

2.2.2. Conflict of interest

Most of the literature on modern slavery in business and in supply chain to date “tends to

provide unhelpful caricatures of modern slavery, for example, as good/bad for business, as simply

an economic externality […]”(Caruana et al., 2020, p. 2). This fact leads scholars to overlook

conflicts of interest between suppliers and focal company, procurement and board level functions

and focal company and shareholders. Jaiswal and Ha-Brookshire (2020) acknowledge power

imbalance in the Indian apparel market and found that when multinational buyers attempt to use

power to advance compliance goals, suppliers were only extrinsically motivated and therefore

transparency mechanisms were under-developed. And Villena and Dhanorkar (2020) studying

institutional pressures on climate change incentives reveals that suppliers with incentives are more

susceptible to accept normative pressures on carbon transparency requirements.

Crane (2013) proposes that a conducive industry context leads to modern slavery adoption

and that effect is moderated by supply chain interventions. However, supply chain interventions

may not be well aligned to combat modern slavery occurrence, for example, when buyers exert

business power to reduce costs or when suppliers offer resistance because they “fear higher labor

costs” (Wilhelm et al., 2020, p. 5). And even when the focal company incentivize (Villena &

Dhanorkar, 2020) or pressure (Jaiswal & Ha-Brookshire, 2020) its suppliers towards sustainability

and transparency goals, results may not be as expected.

Studies on shareholders and stock market responses have not found promising results

regarding transparency and modern slavery avoidance. Birkey et al. (2018) found significant

negative stock market reaction to the passing of transparency legislation in California. While

Jacobs and Singhal (2017) found no significant stock market reaction to the Rana Plaza disaster,

suggesting that firms have little economic incentive to revise its sourcing strategies. Even within

the firm, conflicts of interest may arise and spoil attempts to avoid modern slavery occurrence.

“Modern slavery should not be a problem confined to the procurement function – along with other

23

aspects of sustainability it must be fully embedded and elevated to the boardroom level”(Stevenson

& Cole, 2018, p. 94). And even in the public sector, Rogerson, Crane, Soundararajan, Grosvold

and Cho (2020, p. 19) argue that “such little consideration is given to Procurement at Board level

that purchasing departments are free to view themselves as not in competition with one another”.

2.2.3. Collaboration and contract duration

Contract duration is one indicator of time (Ateş, Wynstra and van Raaij, 2015) and strength

(Ravindran, Susarla, Mani and Gurbaxani, 2015) in buyer-supplier relationship. Short-term

contracts are usually associated with price reduction strategies, lower commitment in value-adding

activities and flexibility, in the other hand, long-term contracts are mostly associated with

expectation of continuity and stability (Ateş et al., 2015). Long-term oriented relationship is an

influential antecedent to suppliers’ performance, even though contract duration alone is not a

sufficient condition of suppliers’ compliance with codes of conduct, suppliers with long-term

contracts are more likely to comply (Jiang, 2009).

Engaging in supplier development strategies is a way for buyers to improve societal

performance of its suppliers, leading to sustainability (Benstead et al., 2018; Hajmohammad &

Vachon, 2016; Yawar & Seuring, 2018). An imperative to make possible the strategies adopted by

organizations such as engaging in supplier development strategies, communication and compliance

strategies (Yawar & Seuring, 2017, 2018) is long-term oriented (Beske & Seuring, 2014) and

collaborative (Benstead et al., 2018) buyer-supplier relationships. As well as collaboration between

traditional and non-traditional actors of a supply chain, such as suppliers, competitors, trade bodies,

NGOs and industry unions (Benstead et al., 2018; Hahn & Gold, 2014; Huq et al., 2016; Stevenson

& Cole, 2018).

2.2.4. Complexity and distance

Highly complex and fragmented supply chains hamper the traceability of working

conditions (Benstead et al., 2018; Gold et al., 2015). Also, lower-tier suppliers are more passive in

addressing labor issues as they perceive lower risks of being penalized (Villena & Gioia, 2018).

Furthermore, “slavery is not measurable ex post because commodity-type products made from

slave [labor] cannot be identified once they reach the supply chain’s next tier” (Gold et al., 2015,

p. 491). Labor intermediaries and third party contract workers also contribute to increase

24

complexity, and thus to unfree labor (Barrientos, 2008, 2013). The use of third party contract

workers are the “Achilles Heel” of corporate codes (Barrientos, 2008).

“A long geographical distance between the point of material extraction or pre-fabrication

and the point of use or consumption generally makes it harder for businesses to identify slavery in

their supply chains” (Gold et al., 2015, p. 491). Crane (2013) discusses that a greater likelihood of

modern slavery adoption is linked with a conducive geographic context which includes physical

distance, and also psychological and political distance of workers. The physical distance is usually

analyzed in the context of global value chains and global outsourcing (Barrientos, 2008; Gereffi,

1994). While psychological and political distance are not limited to distant producers.

Chesney, Evans, Gold and Trautrims (2019) explores the Spanish agricultural sector, where

much of Europe’s vegetables are grown, as a case of labor exploitation. The authors found that

“exploitation flourishes in communities of like-minded companies that do not care about

mainstream norms” and “regarding isolation and connectedness of employers, cluster effects and

intense inter-employer communication are particularly effective drivers of underpayment if the

cluster is homogenous in terms of wage level and if it is isolated from law-abiding employers”

(Chesney et al., 2019, p. 696).

Not only physically distant supply chains are vulnerable to modern slavery occurrence, but

also domestic supply chains. Global value chain literature has placed the developed countries in

the position to advocate and adress the modern slavery issue on developing countries with a

perspective that the problem just occurs far from the developed world, while disregarding that

modern slavery occurs in supply chains both in developing and developed countries, and also

domestically. (Crane et al., 2019). This literature “has tended to locate the solution to the problem

of forced labor in supply chains in public and private governance initiatives to address forced labor

in the developing world, with an emphasis on public ‘disclosure’ legislation and corporate social

responsibility in developed countries” (Crane et al., 2019, pp. 100, 101). That understanding of the

problem has had great influence on recent policymaking, such as the passing of the UK Modern

Slavery Act, demanding public diclousure from british companies on how they are taclking modern

slavery in theirs supply chains.

2.2.5. Legislation

25

Supposedly, stakeholders are empowered when companies provide supply chain

transparency (Doorey, 2011), and thus have a watchdog role (Gold & Heikkurinen, 2018)

monitoring and pressuring business leaders to improve corporate behavior (Doorey, 2011). Several

countries have started to address modern slavery through legislations (e.g. Brazilian multi-

stakeholder initiative “National Pact for the Eradication of Slave Labour”, California in the USA

and UK requiring reports on efforts to abolish slavery with the “California Transparency in Supply

Chain Act” and “Modern Slavery Act” consecutively) (Gold et al., 2015). Those new legislations

tackling modern slavery occurrence in supply chains through transparency have opened a stream

of research on the efficacy, compliance and impacts of such legislations (e. g. Benstead et al., 2018;

Birkey et al., 2018; Flynn, 2020; Stevenson & Cole, 2018).

Most of the research to date on legal attempts to promote supply chain transparency has the

UK’s Modern Slavery Act (2015) as subject (Benstead et al., 2018; Flynn, 2020; Flynn & Walker,

2020; LeBaron & Rühmkorf, 2019; Rogerson et al., 2020; Stevenson & Cole, 2018), but other

studies also have focused on The California Transparency in Supply Chains Act (2010) (Birkey et

al., 2018; Lee, Lee and Ma, 2018) and Australia’s Modern Slavery Act (2018) (Christ, Rao and

Burritt, 2019). LeBaron et al. (2019) examine the regulatory process of passing the UK’s Modern

Slavery Act. The authors found, as expected, business opposition regarding new legislation.

In relation to compliance with disclosure legislation, Flynn (2020) found that prior social

responsibility commitment, firm size, industry, network involvement and headquarter base in UK

are significantly determinants of corporate compliance, while profitability, media exposure and

shareholder concentration are non-significant. Network involvement is discussed in more detail as

horizontal collaboration by Benstead et al. (2018).

Although firms have made changes in response to new legislations as creating new key

performance indicators, adopting new policies, strengthening contract terms and establishing

working groups (Flynn & Walker, 2020). Statements were found to be substantially heterogenic

(Stevenson & Cole, 2018), “merely symbolic” (Monciardini, Bernaz and Andhov, 2019), and

“disclosure response appeared to be more symbolic than substantive in nature” (Birkey et al., 2018,

p. 827), however, high-supply chain risk companies had significantly higher disclosure

extensiveness (Birkey et al., 2018) and more proactively made necessary changes for compliance

(Flynn & Walker, 2020).

26

Howsoever, LeBaron and Rühmkorf (2017) argue that voluntary reporting, which is the

case for the UK Modern Slavery Act, have impair the effectiveness of governance initiatives, while

criminal corporate liability legislation, the case for UK Bribery Act, appears more effective in

promote changes to corporate strategy. And even when studying the public sector, Rogerson et al.

(2020) argue that “modern slavery statements are persistently poor on detail, lack variation and

have led to little meaningful action to tackle modern slavery”.

2.2.6. Critiques

Focal companies have brand reputation, likelihood of legal action and further investments

ate stake when pushed towards taking responsibility for their supply chains (Gold & Heikkurinen,

2018). “[Managers] need to trade off the potential reputation and competitive gains from being

more transparent than the competition, against the reputational risk should their statement be

falsified or against the potential loss of competitive advantage from information leakage” and

“should also consider what their statements reveal to upstream suppliers and sub-suppliers

(Stevenson & Cole, 2018, p. 94). Also, companies find that collecting and disclosing supply chain

information is costly and might not provide clear benefits (Sodhi & Tang, 2019).

“[T]ransparency is losing its innocence: more transparency is no longer always the best for

citizen-consumer empowerment and for the sustainability of value chains. But value chain secrecy

is not an attractive alternative” (Mol, 2015, p. 154). Gold and Heikkinen (2018) criticize the

romantic notion of transparency. The authors term “Transparency fallacy” as “[…] the erroneous

belief that stakeholder claims for transparency will lead to responsible behavior” (Gold &

Heikkurinen, 2018, p. 318). According to the authors, the fallacy happens because it ignores the

opacity in organizations and the conditions of international supply chains, such as complexity,

distance, and resistance. Acknowledging that, stakeholders and corporate managers should focus

on changing those conditions.

It is argued that requirements to public disclosure led to corporate responsibility narratives

rather than responsible behavior (Christ et al., 2019; Gold & Heikkurinen, 2018). It is also

questioned if supply chain transparency lead to action, and if so, does not imply effective corporate

actions in tackling modern slavery (Monciardini et al., 2019). Gold and Heikkurinen (2018)

question the rationale of transparency. The authors specifically question what are the outcomes of

stakeholders claims for transparency, “[warn] against [over-emphasizing] the watchdog role of

27

stakeholders intended to make companies behave more responsibly and sustainably, and instead

[call] for greater emphasis on the influence of the ethics of the [organization] and the supply chain

conditions that shape corporate [behavior]” (Gold & Heikkurinen, 2018, p. 329).

Egels-Zandén et al. (2015) analyzed how a company attempted to adopt supply chain

transparency and the outcomes of such attempt. Authors found that managers face three trade-offs

(i.e., threat vs. collaboration, standardization vs. differentiation, and means vs. ends) when

attempting to implement it. From those trade-offs, managers have two approaches to follow:

compliance or cooperation. When following compliance, supply chain transparency is employed

in a similar way as on codes of conduct. This approach is easily communicated and increase firm’s

legitimacy, but the downside is that it requires to jeopardize relationship with suppliers that resist

transparency attempts. When following cooperation, managers seek to understand its supplier

network context, seeing supply chain transparency as a mean to improve sustainability conditions.

While cooperation minimizes conflicts in the supply network, it makes external transparency

difficult and may lead to perceived greenwashing.

2.3. Hypothesis development

Modern slavery across supply chains is a problem that calls for transparency (New, 2015).

Following Doorey (2011) argument, when engaging in supply chain transparency, managers will

be more aware of the practices under its supply chains. Legislations demanding supply chain

transparency follows the argument that it has the power to avoid modern slavery occurrence. Gold

and Heikkurinen acknowledge the opacity present in many supply chains and thus, the inability of

many firms to provide supply chain transparency. “[…] transparency could be fostered by reducing

the complexity and distance of the economic [organization] to a comprehensible state […]” (Gold

& Heikkurinen, 2018, p. 329). Complexity and distance can hide what is going on upstream in the

SC. However, the decision to seek transparency is strategic (Egels-Zandén et al., 2015), and not a

decision that buyers have the scope to make. While traceability is a core enabler of sustainable

supply chain management and can be incorporated as a business activity (Garcia-Torres, Albareda,

Rey-Garcia and Seuring, 2019) by purchasing departments.

While Croson, Schultz, Siemsen and Yeo (2013, p. 1) acknowledge that “[m]anagers may

have the best of intentions, but are often unable to move their organization in the right direction”,

and procurement function has being given little consideration at board level (Stevenson & Cole,

28

2018). Thomas, Darby, Dobrzykowski and van Hoek (2020, p. 1) found that buyers prefer to select

suppliers with desirable levels of employee welfare, pricing and philanthropy, and states that

“Social sustainability has emerged as a key determinant in supplier selection.” Therefore, the first

hypothesis is:

H1: Traceability, of both finished product and fabric, will be the most important attributes among

cost, supplier location, and supplier relationship length.

Supplier sustainability risk is the potential negative aftermath on a buyer of its suppliers

misconducts (Hajmohammad & Vachon, 2016). What Roehrich, Grosvold and Hoejmose (2014)

call reputational risk. In the context of this research, the occurrence of modern slavery upstream in

the supply chain is the supplier sustainability risk faced by the focal firm. It becomes a reputational

damage once stakeholders are aware and decide to act against. Thereby, when managers are aware

that they face a reputational risk, they may choose suppliers with more caution and valuing more

attributes related to traceability, safety, and control. Thus, the second hypothesis is proposed:

H2: Exposure to modern slavery occurrence in fashion retailers will alter buyers’ ranking

preference of suppliers’ attributes compared to the group of buyers who did not were exposed to

the issue.

3. METHOD

To assess the research question and test for the hypotheses developed in section 2.3, a

controlled experiment was employed using two approaches: scenario-based role-playing and

discrete choice. Priming is used as a manipulation of modern slavery occurrence in fashion supply

chains. For the investigation of buyers’ preferences in supplier selection, a discrete choice

experiment of supplier selection was employed. Participants were asked to choose their preferred

supplier in eleven choice sets of two suppliers varying attributes levels in a discrete choice exercise.

3.1. Experimental vignette methodology

Vignette-based experiments are suitable for studies in the areas of operation and supply

chain management that seek to understand judgments, preferences and why a decision is made

29

(Rungtusanatham, Wallin and Eckerd, 2011). Vignettes are brief descriptions of a situation with

precise references of what is expected to be analyzed in the respondents' decision-making process

(Alexander & Becker, 1978). This research strategy was chosen for this study because it makes

possible to analyze the effect of different factors on human behavior, systematically varying the

manipulations, in addition to making the situation of decision-making more real and standardizing

the stimuli given to respondents (Alexander & Becker, 1978).

Due to its illegality, modern slavery occurrence in supply chains requires to consider

bounded economic rationality in explaining its adoption (Crane, 2013). Experiments offer

appropriate means of answering behavioral queries, achieving understand of deviations from

behaviors and studying research questions that consider unethical behaviors of individuals (Eckerd

& Bendoly, 2011).

For scenario-based experiments, vignettes must be properly designed and validated

(Rungtusanatham et al., 2011). To do so, the three steps suggested by Rungtusanatham et al. (2011)

for the design of vignettes were followed.

The first stage consists of pre-design, where the researcher gets familiarized with the

context of the study. For this stage, interviews with specialists were conducted, more details on

interviews learnings are presented in the section “Interviews with specialists”. The design stage is

the second step. Based on the information collected in the interviews with specialists, and the

factors of interest in this research, the scenarios of the vignettes were written in different versions

so that it is possible to test the hypotheses. Post-design is the vignette validation stage. This last

step is extremely important to ensure the vignette as it will be presented is clear, realistic, complete

and effective (Rungtusanatham et al., 2011). In the pilot phase, manipulation checks, realism check,

and attention checks were conducted to ensure reliability to the final experiment, results from this

phase are described in sections 4.2 Reliability and 4.3 Manipulation checks.

3.2. Manipulation

A news snippet describing 38 retailers involved with modern slavery in its supply chains

was the priming chosen as a manipulation to test the first hypothesis of buyers ranking preference

of suppliers’ attributes. Control group read a random news snippet related to astronomic events.

Demand effects are related to “changes in behavior by experimental subjects due to cues

about what constitutes appropriate behavior (behavior ‘demanded’ from them)” (Zizzo, 2010, p.

30

75). As demand effects is one of criticisms against in experiments, and are of greater concern when

research question is related to sensitive topic (Eckerd, DuHadway, Bendoly, Carter and Kaufmann,

2020), this experiment was designed as between-subjects and the control group received a

treatment unrelated to the context of the study in an attempt to minimize those effects (Eckerd et

al., 2020; Lonati, Quiroga, Zehnder and Antonakis , 2018). Respondents were randomly assigned

to manipulation or control group.

Although a very popular treatment mechanism in fields such as marketing, the use of

priming in operations management field is extremely rare, with the work of Villa and Castañeda

(2020) being one of the unique examples. The authors used an episodic priming task to manipulate

power in their laboratory experiment. This research adopts priming as a mechanism to sensitize

participants to modern slavery occurrence in fashion supply chains. Our expectation is that being

exposed directly to the issue, participants’ conscience towards modern slavery would be reinforced,

therefore choosing suppliers with higher levels of traceability, trust, and control.

3.3. Discrete choice experiment

To test the hypotheses related to suppliers’ attributes importance for buyers in supplier

selection, a task of supplier selection was simulated throughout an unlabeled, orthogonal, and

balanced discrete choice experiment.

Discrete choice models are used to describe decision-makers’ preferences among

alternatives (Train, 2002). Choice modelling is developed from random utility theory, which

assumes that “an individual has an unknown ‘true’ utility or value that consists of a mean value that

can be inferred from a series of observations of choice, and random error” (Louviere, 1984, p. 84). A

set of alternatives is called “choice set” and must be mutually exclusive, exhaustive and finite

(Train, 2002).

Each choice set contains two alternatives, each alternative has its attributes and each

attribute vary in its levels (Hensher, Rose and Greene, 2015). For this research, alternatives are

potential suppliers, however, the list of potential attributes and attributes levels are extensive

(Dickson, 1966). To refine stimuli, Hensher et al. (2015) suggets analysts to spend a considerable

level of effort in deriving alternatives, attributes and attributes levels.

3.3.1. Interviews with specialists

31

Following recommendations of Hensher et al. (2015) and Rungtusanatham et al. (2011),

unstructured interviews with specialists were conducted. This step was also keen to give voice to

managers and other stakeholders involved in supplier selection decision making process (Marques,

Erthal, Schott and Morais, 2021). The three main objectives in conducting interviews were to 1.

understand how supplier selection occurs in textile retailers in Brazil, 2. investigate what are the

main attributes of suppliers evaluated by buyers, and 3. explore if and how transparency and

modern slavery impact supplier selection.

Ten interviews were conducted, and interview length ranged from 45 to 90 minutes. Due to

the exploratory nature of the interviews and the research focus on modern slavery occurrence,

participants were not restricted to purchasing managers, coordinators, and buyers, but sustainability

and governance specialists, and also, auditors were part of the sample.

Learnings from interviews with buyers indicates that supplier selection occurs in two main

phases. In the pre-selection stage, suppliers were categorized as the potential type of products that

they were able to manufacture and price range. Also in pre-selection stage, due diligence is

performed to guarantee that a potential supplier can meet regulatory demands and requirements

from code of conduct. This finding is in conformity with Cole and Aitken (2019, p. 1197)

proposition: “[Socially responsible] purchasers require evidence of knowledge development

capabilities of social sustainability practices of suppliers before transactional exchange.”

Selection stage happens as a quotation, suppliers categorized as potential source of a type

of product are requested to present a pilot of the product and a price. A specific question was made

about price range for the product selected to be in the vignette, a basic t-shirt of acceptable quality

for a major retailer, but responses varied, and no conclusion was reached in this stage. During pilot

tests some of the interviewees were asked to evaluate the research questionnaire and provide

feedbacks. Then, price levels were set as R$ 6,00 and R$ 8,00. The lowest price was said to be of

suspect to malpractices, while the most expensive price level is still inexpensive but possible to

reach without compromising responsible practices.

Location and relationship length were mentioned frequently, and both are related to several

other concerns. Location can be related to control of practices, quality, expertise in some product

type, delivery, and inspection capacity. Location is also frequently related to cost, but an interesting

learn is that previously Asian products were less expensive but due to unfavorable exchange rates

for imports and rise in transportation costs, local production can be the least expensive option.

32

Respondents reported that a longer relationship with suppliers is preferable because it favors

workflow and development, increases trust, and helps maintain a lean and recurrent supply base.

But newer suppliers can be more competitive in terms of price and flexibility.

Transparency discourse is not so prominent in Brazil. When asked about transparency,

responses were differed from not being important for some brands because its costumers do not

demand, to something that is important, should be implemented in the future, but it is not a concern

in the present. However, the importance of the local certification emerged as an important topic in

relation to prevent modern slavery and improve overall social sustainability in supply chains

emerged in the interviews, all interviewees mentioned it. That’s why two questions were asked

about The Brazilian Association of Textile Retail [ABVTEX], the most adopted certification which

covers around 23% of clothing retail in Brazil. Questions were related to working experience in a

fashion retailer member of the association and participants’ perception of the certification as an

indicative of sustainable practices among supply chain.

3.3.2. Choice set design

Choice set design involves a series of considerations. Attributes and its levels were defined

combining the learnings of the interviews with research objectives. Unlabeled alternatives were

chosen to avoid bias as respondents could interpret a label as an attribute and assume that a name

could convey an unexpected meaning (Hensher et al., 2015).

Additional considerations are the definition of alternatives profiles and sets of comparison

between profiles. For the number of attributes and levels employed in the discrete choice task, there

are 2x2x2x3x3 = 72 possible combinations. Sawtooth platform was employed for data collection

and some of the analysis. The platform was used to manage all possible profiles, generating eleven

balanced and orthogonal choice sets for each respondent. This functionality provides more trade-

off tests as each participant received different choice sets and thus, research was able to collect

more choice data.

Balance level, as well as the attributes and levels selected for the discrete choice experiment

are presented in table 1. The discrete choice experiment task is comprised by eleven choice sets of

two alternatives each, and sample size is of 42 in manipulation group and 40 in control group, the

sum of number of appearances is 924 and 880 for each group respectively.

33

Table 1 – Level of balance

Manipulation group Control group

Attributes Levels

# of

appereances %

# of

appereances %

Finished product cost

R$8,00 462 50% 442 50%

R$6,00 462 50% 438 50%

Supplier location

Domestic outsourcing (Brazil) 462 50% 440 50%

Outsourcing in Asia 462 50% 440 50%

Supplier relationship length

8 years 462 50% 440 50%

New supplier 462 50% 440 50%

Finished product traceability

The supplier presents invoices and

audits its subcontractors 306 33% 294 33%

The supplier presents invoices when

requested 309 33% 293 33%

The supplier does not share the

information 309 33% 293 33%

Fabric traceability

Buyer determines the fabric supplier 312 34% 289 33%

The supplier presents invoices when

requested 305 33% 293 33%


information 307 33% 298 34%

Source: Produced by the authors

3.4. Dependent variable

Individuals have underlying influences that shapes its choice behavior. The focus of discrete

choice analysis is to reveal those influences, termed utilities. The utility function of decision maker

n in choice set s choosing alternative j is presented in equation 2. 𝑈𝑛𝑠𝑗 can be separated into two

components, the modeled component 𝑉𝑛𝑠𝑗 and the residual error 휀𝑛𝑠𝑗. (Hensher et al., 2015)

𝑈𝑛𝑠𝑗 = 𝑉𝑛𝑠𝑗 + 휀𝑛𝑠𝑗 (2)

34

The observed component of utility, 𝑉𝑛𝑠𝑗, in a discrete choice experiment is the alternative

selected, hence, the dependent variable. The model adopted for this research is demonstrated in

equation 3. Dummy coding was employed for the linear model of conditional logistic regression.

The level of each attribute associated with higher risk of modern slavery occurrence was selected

to assume value 0 and was used as reference level. Thus, a positive coefficient means the most

secure option is more useful than the reference level.

3.5. Population and sample

The fashion industry is the object of this study because it’s a simple manufacture industry

and so, riskier for modern slavery occurrence (Crane, 2013; Gold et al., 2015). It has had several

claims of the issue in brands and retailers across the globe (BBC, 2020; The Guardian, 2020).

Outsourcing is common practice for textile retailers for decades (Gereffi, 1994), thus adequate for

simulation of supplier selection task.

Due to the research focus on one particular industry and a specific task, and also because

experimental design was developed with information gathered in Brazil, population of interest for

this research is limited to Brazilian working professionals experienced in fashion industry and

familiarized with supplier selection. To limit valid responses, screening questions were asked about

working experiences.

To determine the sample needed to answer the research questions, it is necessary to have a

sufficient statistical power in order to detect differences in participants’ preferences (de Bekker-

Grob, Donkers, Jonker and Stolk, 2015). Statistical power is the probability of rejecting the null

hypotheses when it is false. For the model proposed, the minimum sample size (n*) is calculated

as per Cohen & Cohen (2014, p. 449), equation 1:

𝑛 ∗ =

𝐿

𝑓2 (𝑐 − 1)+ 𝑔 (1)

Considering: 1. a significance level of α = 0.01, 2. β < 0.01, 3. three within-subjects

manipulations of two levels each and two within-subjects manipulations of three levels each, thus

𝑉 = 𝛼𝑙. 𝑇𝑟𝑎𝑐𝑒𝑎𝑏𝑖𝑙𝑖𝑡𝑦_𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑙 + 𝛼𝑚. 𝑇𝑟𝑎𝑐𝑒𝑎𝑏𝑖𝑙𝑖𝑡𝑦_𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑚

+ 𝛽𝑙. 𝑇𝑟𝑎𝑐𝑒𝑎𝑏𝑖𝑙𝑖𝑡𝑦_𝑓𝑎𝑏𝑟𝑖𝑐𝑙 + 𝛽𝑚. 𝑇𝑟𝑎𝑐𝑒𝑎𝑏𝑖𝑙𝑖𝑡𝑦_𝑓𝑎𝑏𝑟𝑖𝑐𝑚 + 𝛾𝑙. 𝐶𝑜𝑠𝑡𝑙

+ 𝛿𝑙. 𝐿𝑜𝑐𝑎𝑡𝑖𝑜𝑛𝑙 + 𝜃𝑙 . 𝑅𝑒𝑙𝑎𝑡𝑖𝑜𝑛𝑠ℎ𝑖𝑝𝑙

(3)

35

c = 2332, 4. one between-subjects manipulation of two levels each, g = 21, and 5. an expected

“medium” effect size in population, therefore, f2 = 0.03. The minimum sample sized required for

this research is of 38 respondents.

However, vignette-based experiments in supply chain management field usually seek for 30

respondents per experimental condition in between-subjects manipulation. For conservative

reasons, the target sample size for this research is of 21 x 30, therefore 60 valid responses.

3.6. Data collection

Data collection was conducted from June to July 2021 through online questionnaires.

Initially, we planned to recruit the participants by referral of participants from the phase interviews

with specialists and also referral of researcher’s colleagues. However, sample size target was not

reached by this strategy. The second strategy adopted was contact with working professionals

through cold messaging on LinkedIn. In total, 300 messages were sent.

Combining both strategies, a total of 180 responses were collected. Removing responses

from participants without the desirable working experience and non-reliable answers final sample

contained 82 valid responses. Two platforms were employed for data collection, randomization

was operationalized using Qualtrics and then, respondents were forwarded to Sawtooth for the

discrete choice experiment.

4. RESULTS AND DISCUSSIONS

4.1. Sample description

Total sample is composed of 82 valid respondents. Respondents were randomly assigned

to one of the two manipulation news. Final sample is composed of 42 responses in manipulation

group and 40 in control group.

Regarding gender, 81% are female, 18% are male and 1% are non-binary. 71% of the

respondents are older than 30 years and 94% have, at least, completed higher education, of those,

61% have graduate studies. Almost 50% of the sample have over 10 years of working experience.

Gender, age, and educational level are presented in table 2, and working experience and position

of participants are presented in table 3. When respondent answered “other” for their position, they

were requested to provide a written answer, those responses are consolidated in the table other.

36

Table 2 – Sample description

Gender # % Age # % Educational level # %

Female 66 80.5% 25 or less 7 8.5% Incomplete higher education 5 6.1%

Male 15 18.3% 26 - 30 17 20.7% Higher education 27 32.9%

Non-binary 1 1.2% 31 - 35 30 36.6% Graduate studies: Specialization 40 48.8%

Total 82 100.0% 36 - 40 13 15.9% Graduate studies: Masters 9 11.0%

41 - 45 10 12.2% Graduate studies: PhD 1 1.2%

46 - 50 2 2.4% Total 82 100.0%

Above 50 3 3.7%

Total 82 100.0%

Source: Produced by the authors.

Table 3 – Sample working experience

Working experience # % Position # %

5 years or less 16 19.5% Analyst 24 29.3%

6 - 10 years 26 31.7% Manager 21 25.6%

11 - 15 years 14 17.1% Coordinator 14 17.1%

16 - 20 years 16 19.5% Director 4 4.9%

21 - 25 years 6 7.3% Other 19 23.2%

More than 25 years 4 4.9% Total 82 100.0%

Total 82 100.0%

Other #

Assistant 6

Specialist 2

Buyer 8

Supervisor 1

Owner 2

Total 19

Source: Produced by the authors.

4.2. Reliability

To ensure reliability to the present study, three measures were taken. A realism check, an

attention test and two screening questions, a response was considered valid when met all criteria.

Participants rated the supplier selection task high on realism, measured via 5-point scale (M =

37

4.049, SD = 0.887). The screening questions were related to familiarity with procurement tasks and

with the textile sector, only responses of participants who declared experience with supplier

selection and experience in the fashion industry were consider valid responses. Also, three

questions were asked to test participants’ attention to the scenario, valid responses were the ones

which answered all three questions correctly.

4.3. Manipulation checks

To test the effectiveness of the manipulation, respondents were asked three manipulation

check questions. The items presented in table 4 were translated to English by the authors, original

version of the complete questionnaire, in Portuguese, is available in the appendix A. Manipulation

checks means differences were compared with ANOVA. All samples could differentiate

manipulations, thus primming of modern slavery occurrence in fashion supply chains was effective.

Table 4 – Descriptive results for manipulation checks

Item Group n Mean SD

The news I saw at the beginning of the questionnaire alerted me to the

occurrence of modern slavery in fashion.

Manipulation 42 4.238 1.055

Control 40 2.425 1.217

The news I saw made me think about working conditions in the supply

chain.


Control 40 2.650 1.350

The news snippet I read was related to ethics in the fashion market.


Control 40 2.400 1.277


Table 5 – ANOVA of manipulation checks

Item SSQ df MSQ F Sig.

The news I saw at the beginning of the questionnaire

alerted me to the occurrence of modern slavery in

fashion.

Effect 67.35 1 67.35 52.110 0.000

Residuals 103.39 80 1.29

The news I saw made me think about working conditions

in the supply chain. Effect 58.05 1 58.05 44.470 0.000

Residuals 104.43 80 1.31 The news snippet I read was related to ethics in the

fashion market. Effect 82.34 1 82.34 73.420 0.000

Residuals 89.72 80 1.12


38

4.4. Discrete choice analysis

Conditional logit model was employed to test for hypotheses 1 and 2. Dependent variables

for a discrete choice experiment are the alternatives selected, attributes levels are the independent

variables. The interest of this study is to estimate the utilities attributes to each of the selection

criteria: Finished product traceability (tfp), Fabric traceability (tf), Finished product cost (cost),

Supplier location (loc), Supplier relationship length (leng). Only main effects interactions of

attributes were part of the scope for this study, also individual characteristics were not included in

the model.

Variables of the conditional logit model were dummy coded. Reference levels are the riskier

attribute level for modern slavery occurrence in supply chains, therefore a positive coefficient

means the most secure option are more useful for buyers than least secure option, coded as

reference level. For Finished product cost, reference level is the least expensive option, thus, a

negative coefficient means that most expensive option is less useful to choice-makers than refen

rence level. Description of variables, dummy codes, attributes, and attributes’ levels are presented

in table 5.

Table 6 – Attributes' levels codification

Attributes Variables Code Levels

Finished product cost cost 1 R$8,00

0 R$6,00

Supplier location loc 1 Domestic outsourcing (Brazil)

0 Outsourcing in Asia

supplier relationship

length leng 1 8 years

0 New supplier

tfp_l tfp_m

Finished product

traceability tfp_l 1 0

The supplier presents invoices and audits its

subcontractors

tfp_m 0 1 The supplier presents invoices when requested

0 0 The supplier does not share the information

tf_l tf_m

Fabric traceability tf_l 1 0 Buyer determines the fabric supplier

tf_m 0 1 The supplier presents invoices when requested

0 0 The supplier does not share the information Source: Produced by the authors

39

To avoid respondents interpreting one attribute as a “proxy” of other possible attributes that

were not included in the discrete choice exercise, the remainder most cited attributes from

interviews with specialists were mentioned in the vignette as constant. The constant attributes are

the following: Acceptable quality; Payment term of 120 days; Delivery time of 45 days (including

shipping); and High delivery reliability. It is also important to note that any pressure on cost

reduction was made in the vignette. All participants were told that average price for the finished

product in previous orders was R$7,00, including all costs, also transportation costs to firm’s

distribution center.

Table 6 presents two conditional logit regression, for manipulation and control group

performed in R package mlogit and table 7 contains attributes’ importance for both groups

calculated by Sawtooth. With those two tables it is possible to address the research question.

40

Table 7 – Discrete choice

Manipulation Control

(Intercept):2 0.138 -0.065

(0.132) (0.133)

tfp_l 2.884*** 2.385***

(0.269) (0.239)

tfp_m 1.920*** 1.808***

(0.214) (0.212)

tf_l 1.322*** 1.206***

(0.213) (0.204)

tf_m 1.252*** 1.020***

(0.213) (0.195)

cost -0.643*** -0.619***

(0.188) (0.182)

loc 0.420*** 0.862***

(0.134) (0.144)

leng 0.573*** 0.395***

(0.138) (0.132)

Observations 462 440

R2 0.42 0.394

Log Likelihood -185.433 -184.094

LR Test (df =

8) 269.049*** 239.734***

Note: *p<0.1; **p<0.05; ***p<0.01


41

Table 8 – Attributes’ importance

Manipulation Control Difference

Finished product traceability 48.17% 43.59% 4.57%

Fabric traceability 21.85% 23.90% -2.05%

Supplier relationship length 10.73% 8.80% 1.93%

Supplier location 9.63% 14.93% -5.30%

Finished product cost 9.63% 8.79% 0.84%


Main effects indicates that all five suppliers’ attributes have a significant effect on supplier

selection. Results reveals that the most important attributes in supplier selection task was

traceability of finished products, followed by traceability of fabric. Both traceability attributes,

combined, account for 70% of utility for manipulation group and 67% for control group. This finding

supports hypothesis 1 which is in concordance with Thomas et al.(2020) that social sustainability is a

key supplier criteria. And Goebel, Reuter, Pibernik, Sichtmann and Bals (2018) who studied

willingness to pay for sustainability attributes and found higher willingess to pay for social

sustainability dimention.

Over 72% of participants in the final sample could be considered middle-level managers,

thus results are also strengthening Ehrgott, Reimann, Kaufmann and Carter (2011, p. 99) finding that

“middle-level supply managers as internal stakeholders play a major driving role for firms’ socially

sustainable supplier selection”. The results based on a sample of middle-level managers also give rise

to the discussion of conflict of interest. While decisions regarding transparency, whether or not take

advantage of institutional voids, and engage in advocacy to laws enforcement regarding public

disclosure are higher level decisions, the day-to-day practices and decisions are made by middle-level

managers.

The third most useful attribute was different across manipulation groups, supporting

hypothesis 2. Supplier relationship length accounted for 10.7% of utility in supplier selection for

treatment group. And supplier location counted for 14.9% of utility for control group. It can be

inferred that this difference in supplier ranking order for manipulation groups was an effect of the

priming. Relationship length could be a perceived as a “proxy” of trustworthiness by participants that

received the priming of modern slavery occurrence in supply chains. While supplier location could be

perceived as a “proxy” of control.

42

Supplier location was the attribute with the biggest percentual difference in importance between

groups. This is an unexpected finding as modern slavery occurrence is commonly linked to distance

(Crane, 2013; Gold & Heikkurinen, 2018) and complexity (Benstead et al., 2018; Gold et al., 2015;

Gold & Heikkurinen, 2018) in supply chains. Kim et al. (2018) suggets future studies to explore

geographic aspects in ethical sourcing, focusing on the comparisons between country’s views of ethical

sourcing, and the finding from this research could add a suggestion for future studies of geographic

aspects to investigate managers’ sensemaking of a supplier location as a selection criteria. However,

learnings from interviews with specialists suggests that location results could also be interpreted as cost

reduction due to actual exchange rates, unfavorable for imports.

Another unexpected finding was cost as the least important attribute for both manipulation

groups, with the smaller percentual difference in importance. It is specially surprising in control group.

Some assumptions could be made for the reason why cost was the least important attribute. Table 8

provides utilities of attribute levels. Cheapest option was the preferred among both groups, perhaps

respondents have not perceived the cheapest as the riskier for modern slavery occurrence. As all the

vignette, levels for finished product cost were chose based on specialists’ opinion. Maybe the difference

was too impactful for the respondents, it was an increase of 33% on cost. As hypothetical task was for

10.000 units, thus a final difference of R$20.000,00. Another possible reason is that, although

respondents rated the questionnaire task as realistic, no budget constrain was included in the vignette,

thus respondents had no incentive to pay closer attention to cost. This finding contradicts researches

that impose financial restrictions to its model and found economic pillar of sustainability to be the most

important in supplier selection (Xiao, Wilhelm, van der Vaart and van Donk, 2019).

43

Table 9 – Attribute levels utilities


Attribute Level Utility SError Utility SError

Finished product

cost R$8,00 -23.17 3.61 -18.20 4.44

R$6,00 23.17 3.61 18.20 4.44

Supplier location Domestic outsourcing (Brazil) 17.00 4.75 36.99 4.49

Outsourcing in Asia -17.00 4.75 -36.99 4.49

Supplier

relationship

length

8 years 22.68 3.43 18.04 2.92

New supplier -22.68 3.43 -18.04 2.92

Finished product

traceability The supplier presents invoices

and audits its subcontractors 105.65 4.42 92.36 5.97

The supplier presents invoices

when requested 27.99 5.00 30.31 5.96


information -133.64 5.09 -122.67 6.39

Fabric

traceability

Buyer determines the fabric

supplier 37.44 3.86 38.57 5.30

The supplier presents invoices

when requested 26.54 3.69 26.05 5.54


information -63.99 4.97 -64.62 5.98


44

Figure 1 - Finished product traceability - Manipulation group


Figure 2 - Finished product traceability - Control group


The supplier presents

invoices and audits its

subcontractors


invoices when requested

The supplier does not

share the information

-150,00 -100,00 -50,00 0,00 50,00 100,00 150,00

Finished product traceability (Manipulation)


invoices and audits its

subcontractors





-150,00 -100,00 -50,00 0,00 50,00 100,00 150,00

Finished product traceability (control)

45

Figure 3 - Fabric traceability - Manipulation group


Figure 4 - Fabric traceability - Control group


Table 8 and Figures 1, 2, 3, and 4 shows that for both manipulation groups, and for both

traceability attributes, the riskier attribute level, not sharing information with buyers, was the driver

of most nonchoices. That is, respondents were averse to not have information disclosure. This

findings are in line with recent literature on socially responsible purchasing (Cole & Aitken, 2019)

and ethical sourcing (Kim & Chae, 2021). Cole & Aitken (2019, p. 1197) proposes that “[socially

Buyer determines the

fabric supplier





-80,00 -60,00 -40,00 -20,00 0,00 20,00 40,00 60,00

Fabric traceability (Manipulation)

Buyer determines the

fabric supplier





-80,00 -60,00 -40,00 -20,00 0,00 20,00 40,00 60,00

Fabric traceability (control)

46

responsible] purchasers require evidence of knowledge development capabilities of social

sustainability practices of suppliers before transactional exchange.” And ethical sourcing initiative-

based supplier selection implies choosing only suppliers in accordance with ethical and social

criteria, “when potential suppliers are unable to fulfill the requirements of stakeholders in respect

to such criteria, they might be excluded from the selection process” (Kim & Chae, 2021, p. 2).

However, due to method constrains and information burden, only three levels of traceability

were chosen, but results of strong aversion to no information might hinder the effect of having the

higher or the middle level of traceability. Having an invoice from suppliers does not guarantee

traceability, but safeguard for most of local regulatory requirements in Brazil. This labor market

void might undermine working conditions at suppliers, and thus transparency (Marques et al.,

2021).

From interviews with specialists, ABVTEX certification appear to have a significative

relevance on socially responsible supply chain practices, promoting labor standards through a

certification to suppliers. Almost one fourth of Brazilian textile production is manufactured by a

retailer associated with ABVTEX. One of the commitments to join the association is to only

outsource production to a certified supplier. Due to its seemingly importance to Brazilian textile

supply chain, two questions were asked related to working experience in a retailer associated with

ABVTEX and participants’ perception of the certification as a sign of sustainable practices. Both

answers were dummy coded, reference levels were having working experience in a retailer

associated with ABVTEX and agreement that certifications such as ABVTEX are signs of

sustainability, respectively, and joined the research model as individual characteristics. Results

from the conditional logistic regression including ABVTEX items as individuals’ attributes is

presented in table 9. None of the attributes related to the association were statistically significant.

47

Table 10 – ABVTEX conditional logistic regression


(Intercept):2 -0.106 0.145

(0.245) (0.262)

tfp_l 2.903*** 2.404***

(0.271) (0.241)

tfp_m 1.912*** 1.828***

(0.215) (0.214)

tf_l 1.333*** 1.209***

(0.214) (0.205)

tf_m 1.253*** 1.030***

(0.214) (0.196)

cost -0.645*** -0.627***

(0.189) (0.182)

loc 0.431*** 0.867***

(0.135) (0.145)

leng 0.580*** 0.396***

(0.139) (0.133)

abvtex_exp 0.400 -0.284

(0.284) (0.296)

abvtex_sust -0.050 -0.015

(0.35) (0.341)

Observations 462 440

R2 0.424 0.396

Log Likelihood -184.281 -183.634

LR Test (df =

8) 271.351*** 240.654***

Note: *p<0.1; **p<0.05; ***p<0.01


48

5. CONCLUSIONS

To understand the relative importance of supplier criterion when choosing supplier given

the potential presence of modern slavery, a controlled scenario-based discrete choice experiment

was employed. Sample was limited to working professionals with experience in both the industry

and supplier selection task. Results from conditional logistic regression supports that all attributes

(i.e., finished product traceability, fabric traceability, supplier location, relationship length and

cost) impact supplier selection. But traceability of finished product and fabric were the two most

important, accounting respectively for 48% and 22% in manipulation group and 44% and 24% in

control group. This finding supports hypothesis 1.

Another interesting finding from this research is buyers’ aversion to lack of traceability.

Traceability of both finished product and fabric were indeed the most important attributes. But

analyzing utilities in the attribute levels, it is possible to observe that not having information from

suppliers is less useful for buyers. Meaning that when choosing a supplier, the first criteria for

exclusion would be nondisclosure.

Attributes’ importance ranking order varied between manipulation groups, therefore

supporting hypothesis 2. Finished product traceability importance for the group who received

priming of modern slavery occurrence was of almost 50%, followed by fabric traceability,

relationship length, supplier location and finished product cost. While for control group, ranking

order was Finished product traceability, fabric traceability, supplier location relationship length,

and finished product cost. This finding supports the importance of disclosure when modern slavery

is found in a supply chain as an alert to the industry. Furthermore, supports the importance of

legislations that demand transparency and increase awareness of the issue to all stakeholders.

5.1. Limitations and future research

It is important to acknowledge limitations to generalizability. Experimental designs

compromise external validity in favor of internal validity. Results are limited to Brazilian textile

context, sample, and vignette-description. Future research could extend supplier criteria, and

industry context, as well as replicate the experiment in other countries, and also test for interactions

between attributes effects, as this research focused solely on main effects.

Even though experimental design was developed after a series of exploratory interviews

and participants reported a realistic task, it would be valuable to further explore attributes of cost,

49

supplier location and relationship length and traceability levels. This research opted for no trade-

off on cost, or impose a budget constrain to vignette description, this approach could have

influenced attributes ranking order. To further investigate this issue, a willingness to pay

experiment could be employed. A distant supplier could be interpreted as harder to monitor and

control, however other topics could relate to a specific location such as cost, quality, production

time and expertise. Therefore, future research is needed to investigate buyers’ sensemaking of

supplier location.

50

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APPENDICES

Appendix A – Research protocol (Portuguese)

Cover page:

Muito obrigado por fazer parte desta pesquisa sobre seleção de fornecedores. A sua participação é

muito importante para o sucesso deste estudo!

Leia com atenção todas as instruções da pesquisa e lembre-se de que não existem respostas certas

ou erradas, apenas respostas que são verdadeiras para você.

Este questionário levará cerca de 5 a 10 minutos.

Todas as informações coletadas durante o preenchimento são confidenciais e serão

anonimizadas.

Ao final do questionário você poderá informar seu e-mail de contato caso queira receber o

sumário executivo com os resultados da pesquisa. O preenchimento do e-mail não é obrigatório e

será utilizado apenas para o retorno dos resultados como forma de agradecimento pela sua

participação.

Você pode, a qualquer momento durante o preenchimento deste questionário, desistir da sua

participação. Ao concluir o questionário você consente com o uso de suas respostas neste estudo.

Caso esteja ciente das instruções descritas acima e concorde em participar deste estudo, clique em

"iniciar questionário".

Você poderá tirar dúvidas sobre o projeto de pesquisa e sobre sua participação entrando em

contato com a pesquisadora Victoria Esquilar através do e-mail [email protected]. O

termo de consentimento completo está disponível neste link.

https://docs.google.com/document/d/1tYcdSJc917f9mhv6DB8IvCxiSE-Qv5Ce3ACQWEMRaNk/edit?usp=sharing

62

Manipulation (Treatment group)

Por favor leia o trecho da notícia e depois, clique em continuar.

63

Manipulation (Control group)

Por favor leia o trecho da notícia e depois, clique em continuar.

64

Common module

Se imagine na seguinte situação:

Você é o gerente de compras da Fashion, uma varejista de moda feminina.

A Fashion tem como missão “Oferecer aos nossos clientes acesso à moda através de preços

acessíveis e coleções modernas” e as políticas da empresa refletem sua missão.

Na semana passada você enviou um pedido de cotação de 10.000 camisetas básicas de algodão

para fornecedores de peça acabada.

O custo médio da unidade de camiseta acabada nas últimas compras é de R$7,00.

A Fashion tem uma política de relação com fornecedores pré-estabelecida. Todos os fornecedores

na sua base, incluindo os novos fornecedores, possuem:

• Prazo de entrega de 45 dias (incluindo o frete);

• Prazo de pagamento de 120 dias após a entrega;

• Qualidade em um nível aceitável para o público da marca;

• Alta confiabilidade de entrega.

Também é importante saber que o custo da peça acabada inclui todos os custos, inclusive de

transporte, até a chegada das peças no centro de distribuição central da Fashion.

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Rating questions

Avalie os seguintes atributos de custo da peça acabada em termos de quão desejáveis eles são.

Indesejável Mais ou menos

desejável

Muito desejável Sem opinião

R$8,00

R$6,00

Avalie os seguintes atributos de localização do fornecedor em termos de quão desejáveis eles são.


desejável


Terceirização

doméstica

(Brasil)

Terceirização na

Ásia

Avalie os seguintes atributos de tempo de relacionamento com o fornecedor em termos de quão

desejáveis eles são.


desejável


8 anos

Novo fornecedor

Avalie os seguintes atributos de rastreabilidade da peça acabada em termos de quão desejáveis

eles são.


desejável


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O fornecedor

apresenta notas

fiscais e faz

auditorias nos

subcontratados

O fornecedor

apresenta notas

fiscais quando

solicitado

O fornecedor

não compartilha

a informação

Avalie os seguintes atributos de rastreabilidade do tecido em termos de quão desejáveis eles são.


desejável


A Fashion

determina o

fornecedor do

tecido

O fornecedor

apresenta notas

fiscais quando

solicitado

O fornecedor

não compartilha

a informação

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Discrete choice experimente (exemple)

Agora você irá analisar as cotações e escolher qual fornecedor receberá o pedido.

Se essas fossem suas únicas opções de fornecedores para a Fashion, qual você escolheria?

73

Manipulation checks

Com base no que você viu neste questionário, responda às seguintes perguntas:

A notícia que vi no início do questionário me alertou para a ocorrência de escravagismo moderno

na moda.

Concordo totalmente

Concordo

Não concordo nem discordo

Discordo

Discordo totalmente

A notícia que vi me fez pensar sobre as condições de trabalho em cadeias de suprimentos.

Concordo totalmente

Concordo


Discordo

Discordo totalmente

O trecho de notícia que li estava relacionado com ética no mercado da moda.

Concordo totalmente

Concordo


Discordo

Discordo totalmente

74

Realism check

A tarefa que realizei neste questionário é realista.

Concordo totalmente

Concordo


Discordo

Discordo totalmente

Attention checks

Na situação apresentada anteriormente, você era:

Gerente de compras

Gerente de vendas

Na situação apresentada anteriormente, você trabalhava na:

Style

Fashion

Na situação apresentada anteriormente, você estava negociando:

Camisetas básicas

Bonés

Screening questions

Você possui experiência de trabalho no varejo ou indústria têxtil?

Sim

Não

75

Você possui experiência de trabalho em tarefas de seleção de fornecedores?

Sim

Não

Demografic questions

Você já trabalhou em uma empresa signatária do selo ABVTEX?

Sim

Não

Não sei

Para você, empresas com certificações como o selo ABVTEX são indicativos importantes de

práticas sustentáveis?

Concordo totalmente

Concordo


Discordo

Discordo totalmente

Você possui quantos anos de experiência de trabalho?

5 anos ou menos

6 - 10 anos

11 - 15 anos

16 - 20 anos

21 - 25 anos

Mais que 25 anos

76

Qual o seu cargo atual ou mais recente?

Estagiário

Analista

Gerente

Coordenador

Diretor

Outro

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