Institutional Predictors of and Complements to Industry Self‐regulation with Regard to Labor Practices

• Published date: 01 September 2012
• Author: Harry J. Buren,Karen D. W. Patterson
• Date: 01 September 2012
• DOI: http://doi.org/10.1111/j.1467-8594.2012.00412.x

Institutional Predictors of and

Complements to Industry

Self-regulation with Regard

to Labor Practices

HARRY J. VAN BUREN III AND KAREN D. W. PATTERSON

ABSTRACT

In recent years, there has been increasing managerial

and academic attention given to a variety of mechanisms

for companies to respond to stakeholder concerns about

global business ethics. One area that merits further

analysis is the role of industry-level cooperation regarding

issues in global business ethics such as labor practices.

There are two main issues that we will address in this

article: institutional pressures that predict when an

industry will create a code of conduct and institutional

complements for an industry-level code of conduct to

be “successful” with regard to responding to stakeholder

concerns about international business operations. We

offer a number of propositions—bringing together work

from both the corporate social responsibility and (neo)in-

stitutional theory literatures—with regard to both pre-

dictors and complements of industry self-regulation in

reference to labor practices.

Final version for Business and Society Review, February 2011 (slightly modified June 2012).

Harry J. Van Buren III is an Associate Professor of Business and Society, Anderson Schools

of Management, University of New Mexico, Albuquerque, NM. E-mail: vanburen@

mgt.unm.edu. Karen D. W. Patterson is an Assistant Professor of Strategic Management,

Anderson Schools of Management, University of New Mexico, Albuquerque, NM. E-mail:

patterson@mgt.unm.edu.

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Business and Society Review 117:3 357–382

© 2012 Center for Business Ethics at Bentley University. Published by Blackwell Publishing,

350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

INTRODUCTION

In recent years, there has been increasing managerial and

academic attention given to a variety of mechanisms used by

companies to respond to stakeholder concerns about global

business ethics. Companies in multiple industries have adopted

codes of conduct, engaged in social reporting (using standardized

reporting regimes such as the Global Reporting Initiative or their

own reporting models), and monitored suppliers located outside

of their home countries. Given the increasing availability of

information to consumers and other stakeholders, it is reasonable

to expect that more and more companies will engage in such

activities in the future, and companies already engaged in such

activities will refine what they do to respond better to current and

emerging ethical issues in global business.

One area that merits further analysis is the role of industry-level

cooperation regarding issues in global business ethics such as

labor practices and environmentally friendly manufacturing. Indu-

stries as disparate as pharmaceuticals (Hemphill 2006), oil (Watts

2005), banking (Wright and Rwabizambuga 2006), tobacco (Palazzo

and Richter 2005), accounting (Neill et al. 2005), and architecture

(Collier 2006) have developed industry-level codes of conduct.1

In this article, we intend to focus on industry-level codes of con-

duct that address labor and human rights issues in the context of

international business operations. Table 1 provides a few examples

TABLE 1 Selected Examples of Industry-level Codes of

Conduct Focused on Labor, Human Rights, and

Environmental Issues

Name Focus

American petroleum institute

environmental principles

Air, water, and soil pollution

Electronic industry code of conduct Factory safety, worker protections,

environmental responsibility

Equator principles Environmental and social impact

of lending

International council of toy industries Factory safety, worker protections

The code (tourism industry) Prevention of child sex tourism

358 BUSINESS AND SOCIETY REVIEW