Social compliance audits and multinational corporation supply chain: evidence from a study of the rituals of social audits

Muhammad Azizul Islam, Craig Deegan, Rob Gray

    Research output: Contribution to journalArticlepeer-review

    19 Citations (Scopus)

    Abstract

    This study investigates the use of social compliance audits in the supply chain of multinational corporations (MNCs). Particularly, we explore the use of such audits in assessing and managing the working conditions of factory workers in the garment industry in a developing nation. Through a range of interviews with MNCs' internal auditors, with commissioned external auditors and with representatives of the suppliers in Bangladesh, this study finds that social compliance audits become ritual strategies and are not a primary means of advancing workers' rights. Drawing on the concept of surrogate accountability, the study suggests that to create real change in workers' conditions and in order to hold MNCs and their suppliers accountable, some form of surrogate (government, non-governmental organisations or media) intervention is necessary. This is, we argue, preferable to leaving it in the hands of 'markets' and simply waiting for another major incident such as Rana Plaza to stir public concern. This study contributes to the literature by investigating how social compliance audits are undertaken by MNCs sourcing products from a developing nation, what motivations drive the adoption of such audits, and what, if anything, are the likely outcomes from the process.
    Original languageEnglish
    Pages (from-to)190-224
    Number of pages35
    JournalAccounting and Business Research
    Volume48
    Issue number2
    Early online date11 Oct 2017
    DOIs
    Publication statusPublished - 2018

    Keywords

    • Social compliance audits
    • Surrogate accountability
    • Supply chain
    • Developing nations

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