Abstract
The stakeholder influences on workplace compliance among Bangladeshi apparel factories across different compliance statuses were investigated. Six prominent stakeholders of the issue were identified: Buyers, owners, government, competitors, workers, and NGOs. Using the Accord’s inspection records, a modified stratified sampling, and an online survey method, responses from 43 "compliant" and 45 "behind-schedule" factories were analyzed. The result revealed that the factories behind the remedial process reported a higher degree of pressure from the government and NGOs as well as their workers than the compliant factories. The data confirmed the buyers as the most pressing stakeholder for both factory groups. The results suggest that the factories that are behind the schedule face an increased level of pressure from the local stakeholders, especially from their workers. The findings carry significant implications for the current transition to the government-controlled inspection and worker protections as well as for non-linear nature of stakeholder influences.
The Bangladeshi apparel industry accounts for US$ 33 billion in global exports in 2019, which places it as the second-largest exporter of apparel (WTO, 2019) 1 . Bangladesh was once regarded as one of the poorest, underdeveloped countries in the world; yet due to its significant economic development during the last couple of decades, the United Nations (UN) reclassified Bangladesh as a developing country in 2018. The apparel sector was the one that made a significant contribution to the country’s economic development. Despite the predominant forecast that it would suffer negative growth when the Multifiber Arrangement (MFA), also known as the quota system, was set to expire in 2015, it even claimed its position as the second-largest exporter of apparel since 2015 (WTO). The sector, in the process, however, has also faced negative publicities due to the notorious violations of workers’ safety in its manufacturing sites in the early 2010s. In 2013, a commercial building collapsed due to a structural failure and killed 1,134 workers near Dhaka city of Bangladesh. Another incident, known as the Tazreen fashion fire in 2012, killed 117 people. Both incidences had warnings, yet the apparel factories continued their operations until the fatalities (Mausumi & Rahman, 2018).
Since these incidences made headlines in the world news, non-governmental organizations (NGOs), government, trade unions, and eventually the retailers and apparel buyers have expressed their concerns for the apparel factories and urged improving the working environment (Kamal & Deegan, 2013). As a result of the various stakeholder pressures and their actions, the apparel sector in the country has been undergoing a remedial process to implement workplace compliance initiatives, primarily led by the Accord and the Alliance, the voluntary remedial agreement set by the global buyers (Mausumi & Rahman, 2018).
A vast number of researchers have emphasized the roles of stakeholders in addressing the problems of sweatshops and unfair labor practices in the global arena (e.g., Hossain & Arefin, 2015; Mausumi & Rahman, 2018; Park-Poaps & Rees, 2010). Although various stakeholders voice their concerns, certain stakeholders are more influential than others and prioritization may happen due to limited resources or practicality (Mitchell et al., 1997; Park-Poaps & Rees, 2010). Studies addressing stakeholder pressures in sustainability also have reported varied impacts of stakeholder pressures across different areas (issues) or depending on the company or contextual factors (Mani & Gunasekaran, 2018; Roy et al., 2020; Wang et al., 2020). However, studies exploring the influence of stakeholders on social implementation in developing countries are scant (Mani & Gunasekaran, 2018). Especially, to this date, empirical research related to stakeholder forces behind the worker safety issue in Bangladesh has been significantly lacking. Only a few studies, either via discussions or qualitative assessments with a limited number of informants, have recognized global buyers as the primary influential force in implementing workplace compliance (e.g., Hossain & Arefin, 2015; Mausumi & Rahman, 2018). It has been several years since the systematic remedial process has begun, yet no generalizable study to this date has examined the influence of stakeholder pressure on workplace compliance in practice.
The purpose of this study was to examine the influence of stakeholders’ pressures on workplace compliance among apparel factories in Bangladesh. Objectives included (a) identifying the salient stakeholders addressing workplace safety, and (b) examining which stakeholder pressures have significant relationships with the compliance statuses of the factories. The major obstacle of this investigation was gathering valid data from the factories. Further, factories are typically reluctant to provide such sensitive information and there has been a lack of disclosure practices in Bangladesh (Mausumi & Rahman, 2018). Therefore, we used public records of compliance status instead of self-reports and matched them with primary data. Reflecting the norm, in which the term “compliance” is typically used to indicate meeting the workplace safety standards in Bangladeshi apparel factories, we used “workplace compliance” in this study.
Literature Review
The Apparel Industry in Bangladesh
Bangladesh is one of the most populous countries in Asia with a 163 million population. Its GDP (Gross Domestic Product) is nearly $303 billion and GNI (Gross National Income) per capita reached $1,940 (The World Bank, 2019). The apparel sector, apart from playing an essential role in the export earnings of Bangladesh, also makes a significant contribution to the empowerment of women in the country (Mausumi & Rahman, 2018). According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), there are a total of 4,368 apparel factories in Bangladesh employing approximately 4 million workers among which more than 80% of the workers are women (BGMEA, 2019). Apparel’s share in Bangladeshi total merchandise export in 2019 was 84.07%, compared to 16% in 1985, which highlights the importance of the sector for the country’s economic development (WTO, 2019).
According to the WTO trade database, the volume of apparel exports has increased from roughly $5 million to $33 billion over the 1981–2019 period. The EU, Canada, the United States, and other smaller markets such as Australia, Brazil, Chile, Japan, are the major importers of Bangladeshi apparel products (BGMEA, 2019). European Union (EU) has been the largest importer of Bangladeshi textile and apparel products followed by the United States (WTO, 2019). The world’s largest retailers such as Walmart, H&M, and Marks and Spencer are the major apparel buyers.
In 2012 and 2013, amid the growth, the sector has been exposed to the media around the world due to two tragic industrial accidents in apparel factories (Mausumi & Rahman, 2018). One of the incidents is known as the “Rana Plaza Collapse.” The Rana Plaza building had been initially approved for commercial space by the local municipality of Savar; but it had been converted into an industrial building for garments production with heavy generators on the top floor, which was a serious violation of building codes (Ansary & Barua, 2015). After a thorough inspection, the industrial police had recommended it to close and suspend every business operation in the building. On the day of the accident, however, the factories remained operating although all the business offices were closed. It was reported that the owners and managers forced workers to come to work by threatening not to pay their wages for 3-days (Ansary & Barua, 2015). The other incident is known as the “Tazreen fashion fire.” It was presumed that the fire started on the ground floor of the nine-stories factory. A large amount of fabric stored in the building made the fire spread very fast, and as a result, workers were trapped on the floors leading to extensive casualties (Ethirajan, 2012).
The safety problem in the industry has existed beyond these highly publicized ones. The Bangladeshi apparel factories have been known for being one of the lowest wage industries across the globe. Extremely low wages and poor working conditions in the apparel industry have persisted in Bangladesh (Berik & Rodgers, 2010). Similar to most other apparel exporting countries, child labor has also been common in the industry. Arif et al. (2017) reviewed the casualties of a total of 69 industrial accidents between 1990 and 2016 in Bangladesh and reported that almost 1,626 workers died and 4,829 workers were seriously injured from the incidences. They found that 94.2% of the incidents were fire-related, 3% were building collapses, and the remaining 3% were other causes. Fire hazards coupled with a lack of evacuation plans seem to be the major cause (Arif et al., 2017). Wadud et al. (2014) have also reported that most of the factories exhibited fire hazards. They developed a fire risk index (FRI) to assess fire risks in 60 apparel factories in Dhaka. They found the mean score of FRI was 2.8 (on a 0–5 scale, a higher FRI score means lower risk) and 67% of the factories scored less than 3. Many factories were also found very poor in various safety parameters of their buildings.
Remedial of Workplace Compliance
After the incidences, the Bangladeshi government set up RMG Sustainability Council (RSC) to inspect and monitor the compliance of apparel factories (Siddiqui & Paul, 2018). However, given questionable enforcement of the local laws, the Accord and the Alliance, two private regulatory programs, voluntary remedial efforts set by the global buyers, were established to ensure workplace safety in apparel factories (Mausumi & Rahman, 2018). Their primary purpose was to keep the workers safe from such possible, yet preventable, workplace hazards. The Accord and the Alliance are similar in their functions and processes; the Accord mainly represents European apparel retailers and trade unions, whereas the Alliance represents American companies. Over 180 retailers and brands, trade unions, and NGOs signed the agreement.
The Accord is governed by a committee composed of the signatory companies and trade unions, and the ILO appoints the chair of the committee. All factories producing for the Accord’s signatory companies must undergo independent inspections by the Accord on fire, electrical, and structural safety matters in their production facilities. The Accord’s Building Standards are largely based on the Bangladesh National Building Codes and the ILO standards (Accord, 2018). The Accord’s inspection reports along with pictures of its findings have been publicly available on its website in English and Bengali. It updates the reports periodically on remedial progress. The factories have been largely categorized into compliant, in-progress, behind-schedule, and ineligible. “Ineligible” factories are those that failed to participate in the Accord program for one or more of the following reasons: 1) refused to temporarily evacuate the factory, 2) showed a lack of progress in corrective action plans, 3) refused to meet worker complaints on compliance issues, and 4) did not cooperate with the Accord inspection (Accord, 2018). The Accord and Alliance have been the leading efforts to improve safety conditions in the factories.
Stakeholders’ Pressures on Workplace Compliance
Stakeholders can determine the survival or failure of a business and create pressure on the businesses to fulfill their interests (Freeman & Reed, 1983). The history behind the workplace safety issue in Bangladesh indicates that the concerns and voices of the stakeholders are the primary driving forces in implementing workplace safety measures in the labor-intensive industry, especially when the remedial processes present noticeable financial and structural challenges. The stakeholder theory has been extensively studied in the business ethics literature (e.g., Helmig et al., 2016; Mitchell et al., 1997) and applied to the studies addressing various social and environmental issues in the apparel industry (e.g., Hossain & Arefin, 2015; Park-Poaps & Rees, 2010; Roy et al., 2020).
In the earlier days of the theory, the business’ obligations to a wide range of stakeholders to establish its legitimacy were emphasized. Stakeholders have been primarily classified into two broad categories depending on their direct (primary stakeholders, e.g., customers) or indirect (secondary, e.g., activists) influence on a business’s survival (e.g., Freeman & Reed, 1983). Others have classified them according to their placement in the business’s boundary (i.e., external and internal) (Roy et al., 2020) and the functions (i.e., internal, market, regulatory) (Maas et al., 2018).
Recognizing the need for managerial priorities given the limited resources of most business entities, Mitchell et al. (1997) theorized stakeholder identification and salience and claimed that the priority and importance of stakeholders differ according to their power, legitimacy, and urgency of the claim. They developed a typology of stakeholders according to these three attributes: dormant, discretionary, dominant, dangerous, core, dependent, and demanding. Empirical studies that have applied the stakeholder theory reported that the stakeholder pressures and their impacts on social and environmental implementation differ by issue (Meixell & Luoma, 2015) and country (Wang et al., 2020) as well as by nature and salience of diverse stakeholders and the process (e.g., Hyatt & Berente, 2017; Maas et al., 2018; Mitchell et al., 1997). For example, Wang et al. (2020) reported that stakeholder pressures had larger effects in developed countries than in developing countries and for non-manufacturing firms than manufacturing firms. Meixell and Luoma (2015) found that different stakeholders have different levels of influence depending on whether the issue was social or environmental. Roy et al. (2020) even showed how different stakeholders influence different areas of sustainability implementation among Indian apparel manufacturers.
The apparel industry that has gone through a global structural change presents a unique setting where production is located in the developing and under-developed countries for consumption in developed countries (Park-Poaps & Rees, 2010). Social compliance such as supplier codes of conduct and certain certificates are typically enforced by global buyers to meet their customers’ standards in developed countries (Roy et al., 2020; Venkatesh et al., 2021). Such coercive pressure from the buyers is the primary reason the suppliers start to engage in a social initiative in developing counties (Kamal & Deegan, 2013; Mani & Gunasekaran, 2018; Roy et al., 2020). Roy et al. (2020) found that the pressure from the buyers and alliances (i.e., external pressure) made the suppliers initiate a sustainability management system, which could be a somewhat symbolic gesture. However, along with intra-organizational learning, a proactive and substantial sustainability performance such as sustainable product design or source reductions could be achieved. They also found that internal stakeholders did not have a direct relationship with the initial commitment to sustainability implementation but did with the proactive implementation. When pressured by the buyers and other external stakeholders, the supplier may move forward with a social initiative, yet it has to process the unfamiliar standards or rationale of the initiative. Therefore, the adoption process includes the firm’s organizational learning and internalizing the pressures/innovation, and then figuring out ways to respond to the pressures effectively and competitively by balancing resources (Hyatt & Berente, 2017; Sarkis et al., 2010).
It is important to note that the stakeholder pressure literature is mainly in the environmental management/strategies area which presents limited applicability to the workplace compliance area. This is because environmental and social compliances/initiatives have been associated with different sets of influential stakeholders (Meixell & Luoma, 2015; Wang et al., 2020). Based on the stakeholder salience theory of Mitchell et al. (1997) and a review of literature on the workplace safety issue in Bangladesh, we identified six salient stakeholders that would have exerted significant influences on the factories’ workplace compliance. Figure 1 provides an overview of the hypotheses to be discussed in the following.
Stakeholders of Workplace compliance.
Owners. An owner or stockholder is a dominant part of a company mechanism and is the most prominent primary stakeholder of an organization (Freeman, 2010). The Bangladeshi corporate sector, in particular, is predominantly controlled by owners (Al Farooque et al., 2007). Most of the companies are owned by a family, a group of families, or a foreign owner. The controlling family, in most cases, selects executive directors, COOs, or the chairperson within the family. An owner also frequently acts as a CEO. The owner’s interest in maximizing the profits with the least investment can present a conflict with other stakeholders on any social issue. Even though the apparel factories are exposed to global standards through their buyers and their agents, owners are typically reluctant to invest in social or environmental initiatives primarily due to high anticipated initial investment and running costs (Hossain & Arefin, 2015; Roy et al., 2020). Hence the owners may not prioritize or may not even support the inspection and compliance certification processes. Due to the power the owners hold in the Bangladeshi apparel sector, the owners could be behind the decision whether the factory would be a forerunner of compliance or would only symbolically comply with the minimum to continue the factory operation.
Customers/Buyers. Freeman (2010) recognized customers as one of the most important primary stakeholders. The survival of the factories would depend on them. For the apparel factories, clothing retailers are the customers, widely known as “the buyers” within the industry, which would directly impact the survival of the factories. Hossain and Arefin (2015) described the buyers as “the most powerful participant of the business deals in Bangladesh.” The buyers are typically the large, global scale conglomerates and have historically shopped for suppliers around the world. If a factory fails to fulfill the buyers’ requirements, it may face substantial financial losses, even get forced out of business (Hossain & Arefin, 2015). Intense media coverage online and offline and protests by activists and consumers after the Rana Plaza collapse in 2013 have made buyers conscious of workplace safety in suppliers’ factories.
Hossain and Arefin (2015) analyzed the role of buyers in improving workplace safety among 10 Bangladeshi apparel factories and found that 90% of the pressures to improve workplace safety was created by the buyers shortly after the accidents. They defined compliance as “obeying the guidelines, rules, and standards set by the buyers in the daily operations while producing apparel products for the buyers,” which illustrates the undeniable power of the buyers. They reported that in addition to forcing basic labor and workplace standards, buyers required a fire extinguisher on each floor and a fire drill at least 12 times a year and almost all buyers visited the factories on an average of 3–5 times a year to audit compliance. The global retailers backed by their consciousness of their reputations have created coercive, urgent influence on the factories with the contract as a hostage. Given that buyers hold the utmost power and urgency, those factories that are under a higher level of buyers’ pressure are likely to start the remediation process and establish compliance early on compared to less compliant factories.
Workers. The workers perform labor-intensive manufacturing tasks. They are often excluded from salary and benefit plans that are typically secured for managerial staff in a factory. Though workers are fundamental to the success of a manufacturing business, they are paid the least, primarily through hour-based wages (Akter et al., 2014). At the same time, these workers are the ones that are exposed to work-related occupational health and safety hazards (Akter et al., 2014). Therefore, the legitimacy of workers’ pressure for workplace compliance is of utmost, yet they do not hold the power in workplace safety. Trade unions typically are supposed to bring out the issues related to the workers’ rights and safety with power (Kamal & Deegan, 2013); yet, trade unions in Bangladesh have not been well-established (Hossain & Arefin, 2015).
Since the Rana Plaza collapse, workers who were concerned about their safety and rights, have started to raise their voices and demand for workplace safety issues (Hossain & Arefin, 2015). In part, the awareness and support through the exposure to worldwide attention to the matter and NGOs’ educational efforts empowered their willingness to voice their interests. In this regard, Hossain and Arefin (2015) emphasized the capabilities of workers because they could influence management decisions. A study that addressed the relative importance of experts, management, and workers in addressing workers’ safety issues in apparel factories indeed reported that the workers were one of the vital parts of the decision-making process (Wadud et al., 2014). A couple of studies in the environmental management literature suggest that although workers or employees may not influence the firms to initiate the environmental initiative, they are likely to influence the firms to create substantive strategies beyond symbolic ones (Hyatt & Berente, 2017; Wang et al., 2020). Workers’ active participation in factory governance and enabling trade unions to ensure their rights could be a significant force for building meaningful compliance in Bangladesh. Therefore, factories may prioritize becoming compliant when the pressure workers exert on the management becomes significant, while non-compliant factories may not sense the pressure from the workers.
Competitors. Competitors can act as prominent stakeholders in any industry, especially in a mature industry like apparel (Freeman, 2010). Competitors stimulate businesses to continuously improve and innovate (Severgnini et al., 2018). More than 4,000 factories compete in the Bangladeshi apparel industry, according to the BGMEA’s membership data as of 2020. The factories frequently compete by bidding to win production orders from the same buyers. The presence of many competitors pushes the factories to increase product qualities and services to remain competitive. Park-Poaps and Rees (2010) found that industry peer pressure had a significant impact on U.S. buyers’ ethical labor management in the apparel supply chain beyond legal boundaries and emphasized that peer actions raise the bar acceptable in the industry. Although there are no industry coalitions or institutions specifically dealing with the workers’ safety matter in Bangladesh, other factories in the sector may have an impact on the norms and practices in dealing with the compliance issue. The competitors’ actions for workplace compliance could exert pressure on a factory especially when the buyers demand them. This seems to be the case in the Bangladeshi apparel sector where powerful global buyers came to an agreement that to be eligible to do business with the signatory buyers, their suppliers were to go through an inspection and remediation process to become compliant.
Government. Businesses, to establish their legal entities, follow the regulations set and enforced by the government. The roles of government in establishing legitimacy and intervening in diverse industrial issues make it one of the most prominent stakeholders of any industry. Especially the government plays a pivotal role in responding to socially irresponsible actions by businesses with its regulative and enforcement powers (Helmig et al., 2016). However, Mausumi and Rahman (2018) criticized that the Bangladeshi government had consciously ignored the issues in working conditions and workers’ rights before the two factory incidents. It is important to note that the government’s strategic partnership with the industry made Bangladeshi apparel manufacturing competitive in the international market, by which labor laws and regulations could have been purposefully unenforced.
Since the accidents, an amendment to the Bangladesh Labor Act 2006 was enacted in 2013. Facing the coercive buyers’ actions and detrimental impact on the sector if not followed, the government started to enforce its regulations. The government also started providing incentives to apparel manufacturers to improve factory compliance (Ansary & Barua, 2015). More recently, it has also established national inspection agencies to manage the inspection of the apparel factories, partly in preparation to take over the inspection process from the Accord (Siddiqui & Paul, 2018). Such remedial efforts by the growing pressure from the government and enhanced legislation seem to become the major influence on workplace compliance.
NGOs. Non-governmental organizations (NGOs) are often defined as non-profit organizations that are not a part of any private or public sector, addressing social inequalities. It is not a primary stakeholder for businesses yet its role in social issues has given them a unique power in developing countries. Backed by such external sources of support, cooperation, and advocacy, the voice of NGOs can influence the government, media, consumers, and other stakeholders on various social issues (Kamal & Deegan, 2013).
The NGOs are very concentrated in Bangladesh primarily because of its economic struggle and poverty not long ago. According to the NGO Affairs Bureau, there were almost 2,643 NGOs actively working in Bangladesh in 2018, of which 2,380 were local, and 263 were foreign (NGO Affairs Bureau, 2018). The apparel industry has always been targeted by NGOs on different occasions and issues such as extensive workload, child labor, worker abuse, female worker safety, minimum wage, and safe workplace. According to Kamal and Deegan (2013), the threats from local and international NGOs were the primary reason why the apparel factories in Bangladesh were working towards CSR disclosure. Similarly, the Accord and Alliance’s prominent power in Bangladesh has contributed to the NGO signatories (Mausumi & Rahman, 2018). In addition, the factories seem to be responsive to the voices of NGOs because they were trusted by the local community for their contributions to the country (Deegan & Islam, 2014). Thus, the compliance status of the factories may reflect how much pressure the factories have experienced from NGOs regarding workplace compliance.
Method
Research Design
An online survey method was used. A self -administered, structured questionnaire was published in Qualtrics to reach distant respondents efficiently. IRB approved the data collection protocol (#18-E-375). The factory was treated as a unit of analysis. We based our sampling frame on the Accord’s inspection record of the factories, which were published on its website. The Accord’s process is a lengthy process that involves initial inspections in multiple areas, remedial recommendations, and follow-up inspections and recommendations. Initially, we were to collect the data from three largely categorized factory groups by the Accord’s records: compliant (100% compliant or remedial in progress on time per the Accord’s recommendation), behind-schedule (remedial unmet the recommendation but in progress), and ineligible. However, almost all ineligible factories were not reachable through our preliminary email and phone contacts. Those factories ineligible to do business with Accord brands were mostly in violation of the state laws and thus were likely forced to be closed as the Accord started passing the list of ineligible factories to the Bangladeshi government to handle the closure and relocations. Therefore, we gathered the data from the two remaining groups (i.e., compliant and behind-schedule).
Considering typically low response rates of business participants and the common restraint in sharing corporate information, we followed the procedure used by Park-Poaps and Rees (2010). A modified stratified sampling was employed to randomly select 500 factories from each of the compliant and the behind-schedule groups. Stratified sampling provides precision in representing the population where subgroups exist (Hillson, 2015). The contact information of the prospective respondents in each factory was obtained from the Accord and the Bangladesh Garments Manufacturing and Exporters Association (BGMEA) website. ||Among 1,000 factories, 825 were successfully reached primarily by emails and calls and supplied with an email address of a possible respondent from the factory. Given the nature of the survey, we were seeking management-level personnel familiar with factory operations as respondents. We did not specify the topic of the survey during this stage.
An email invitation to the survey was sent to each of the 825 factories along with two links, one for the English version and the other for the Bengali. One week after the initial e-mail, a reminder email was sent. Two weeks after the initial e-mail, the final reminder email was sent. Once the procedure is completed, follow-up phone calls were made to maximize the response rate. Participation in the survey was voluntary and participants were assured that their identities and responses would remain confidential. A total of 116 completed responses were received, resulting in a response rate of 14.06%. This is comparable to similar surveys (e.g., Hyatt & Berente, 2017). After careful review of the returned responses, 28 responses were determined unusable because of a significant number of missing values or invariable responses. Among the 88 valid responses, 43 factories (48.86%) were compliant and 45 (51.14%) were behind-schedule. The data collection started in March 2019 and ended in May 2019.
Instrument
The survey questionnaire included the items to measure managerial perceptions of the aforementioned stakeholder groups’ pressure regarding workplace compliance. The scales were developed to capture the magnitude of pressures exerted by each respective stakeholder based on the relevant literature (i.e., Helmig et al., 2016; Park-Poaps & Rees, 2010; Wu et al., 2017; Zhang et al., 2015) and practicality in Bangladeshi apparel factories. Some items in the scales were reverse scaled to prevent a common method bias. The pressure from each stakeholder group was measured by a multi-item scale. The respondents were asked to indicate the level of their agreement with each statement (i.e., measurement items) on a seven-point Likert-type scale. The measurement items are reported in the analysis section.
A pilot test was conducted to increase the face validity of the instrument and measurement items with several apparel factory professionals in Bangladesh and researchers in the field. Further modifications to the instrument were made according to the comments received regarding the content and readability of the content. The English version was first developed, and a bilingual speaker translated it into Bengali. The translated version was then back-translated to English by another bilingual. The back-translated version was compared to the original English instrument and we made necessary changes to resolve the differences. The process was repeated until the back translation resulted in the same as the original English version. Eighty-one respondents (92.05%) participated in the English version of the survey and 7 (7.95%) in the Bengali version. Independent sample t-tests were conducted on several key variables to detect whether the language was a confounding variable and verified that the two language groups were not significantly different in their responses. Hence, the two groups were combined for data analysis. Further, the same tests were run on the responses that were received before and after follow-up phone contacts to detect possible late response bias and a confounding effect of follow-up contacts. The results verified that there were no significant differences in responses between the two groups.
Analysis and Results
Sample Description
Table 1 summarizes the demographic profiles of the respondents. Among 88 respondents, 85 (96.59%) were males and only 3 (3.41%) were females. Forty respondents (45.45%) held a top-level position (e.g., a manager or a general manager) and 48 (54.55%) participants held a mid-level position (e.g., an assistant manager or a merchandiser) in their respective factories. The titles in Bangladesh indicate different rankings, unlike the American norms. Most respondents (n = 59; 67.05%) had a Bachelor's or equivalent degree. Most factories (89.77%) were owned by local companies, three were foreign-owned, and one was jointly owned with an Indian company. About half of the factories (53.41%) were located in Gazipur, a neighboring city of Dhaka, where nearly 2,000 apparel factories were concentrated. Many of the remaining factories were also located in the vicinity of Dhaka. The number of workers in the factories ranged from 200 to 50,000 with 9,592 as the mean (SD = 10,363).
Characteristics of the Respondents and their Factories.
Note. The titles in Bangladesh carry different managerial ranks compared to the norms in the US.
Reliabilities of the Measurements
The reliabilities of the multi-item scales were assessed using Cronbach’s alpha coefficients. The initial results indicated that two out of the six scales achieved an alpha value greater than the widely agreed acceptable value of .70 (Premkumar, 2003). Cronbach’s alphas for worker and NGO pressures were in the acceptable range,.73, and .83 respectively. Cronbach’s alpha for the owner, buyers, government, and competitor pressures, however, were below the threshold, .63 .62, .68, and .65. After deleting the items that were exhibiting low convergence with other items in the scale, Cronbach alpha was improved to .74 for owners, .71 for buyers, and .70 for competitors. Cronbach’s alpha for government pressure was .68, which was slightly lower than the threshold. The items of the scales and scale reliabilities are reported in Table 2.
Descriptive Statistics of the Variables and Measurement Items Included in the Questionnaire.
Note. *Reversely coded.
The Relationship between Stakeholder Pressures and Workplace Compliance
A series of independent sample t-tests were conducted to determine whether significant differences existed in stakeholder pressures between the two groups of factories. Table 3 shows the mean (M) and standard deviation (SD) of the stakeholder pressures reported by the two factory groups as well as the significance of the mean difference tests. The levels of workers’ pressure were significantly different between the two groups (p < .05). Interestingly, behind-schedule factories reported a higher level pressure from the workers (M = 5.52, SD = .95) than the compliant factories did (M = 5.09, SD = 1.32), [t (86) = 1.98, p = .04], contrary to the direction of the hypothesis. Government and NGOs also showed moderate significance, suggesting possible, although inconclusive, significances (p < .10). The level of pressure from government perceived by the behind-schedule factories (M = 5.15, SD = 1.04) seems to be higher than complaint group’s (M = 4.74, SD = 1.25) (t (86) = 1.58, p = .09). Similarly, the behind-schedule factories recorded a higher level of pressure from NGO (M = 4.90, SD = 1.78) than those who were compliant (M = 4.32, SD = 2.07) (t (86) = 1.78, p = .07).
Results of Independent Sample t-tests Between the Factory Groups.
*Significant (p < .05); † Moderate significant (p < .10).
Discussion
We identified six stakeholders that have been prominent in addressing workplace compliance issues in Bangladeshi apparel factories and examined which stakeholder pressures had significant relationships with the compliance statuses of the factories. Generalizable studies regarding stakeholder roles in workplace compliance in developing countries have been scant primarily due to the difficulties in collecting data. We used secondary data publicly available from the Accord (i.e., compliance status) and gathered primary data on stakeholder pressures. These two sets were matched, by which no compliance-related answers in practice were reported by the respondents so that social desirability bias was minimized.
The results revealed that the three stakeholder groups’ pressures, NGOs, workers, and government pressures, were perceived significantly higher by the behind-schedule factories than compliant factories. This finding suggests that the factories that struggle to keep up with the demands of buyers and the requests by the Accord seem more pressured by these local stakeholder groups compared to the compliant factories, especially by their own workers. The notorious incidents and the work of the Accord seem to have made the workers become aware of their rights and begin playing the primary force towards workplace safety in the factories (Hossain & Arefin, 2015). The Accord agreement with the global buyers had also included regular worker education (Mausumi & Rahman, 2018) which could explain the increased level of workers’ empowerment. The factories with a below-par condition could have made the workers frustrated and amplified their voices. We hypothesized that compliant factories could be contributed to the respective stakeholder pressures and their effectiveness in changing factory compliance. However, without the data from ineligible factories, the conclusion is not possible in this study. Yet the results indicate the workers could be the major force for the factories to continue with workplace compliance procedures at the time of data collection.
Similarly, these behind-schedule factories reported a higher level of pressure from the government and NGOs than the compliant factories. Not having a compliance status on the Accord’s list could bring a detrimental financial impact on these factories. The government has been active in remedying the apparel manufacturing sites for workers’ safety since the notorious incidences (Mausumi & Rahman, 2018). It has taken stringent public and non-public disciplinary and enforcement actions for the factories not compliant with the safety standards (Mausumi & Rahman, 2018). Such reactions and strict enforcement could have clarified the government’s affirmative position about the workplace compliance issue which put significant pressure on the non-compliant factories. It appears that the NGOs who have raised their voices for workplace safety and labor rights also could level up their pressures on the factories that are behind the remedial procedures. It could be that the non-compliant status itself after years of inspection/remedial process could have made the factories more conscious of the status.
The behind-schedule factories and compliant factories, however, were not different in the levels of buyer pressure they felt. It is important to note that our data exhibited relatively high mean scores for both groups. As discussed earlier, codes of conduct or supplier compliance in labor issues in developing countries are coercive with the contract as a hostage. Several studies (e.g., Hossain & Arefin, 2015; Mausumi & Rahman, 2018) have confirmed that buyers were the ones that created the most pressure on the factories. The industry is very much buyer-driven, by which fulfilling the buyer demand is the ultimate goal; hence, the influence of the buyers seems universal and ongoing even on those that were already compliant.
Implications and Recommendations
The finding of this study that behind-schedule factories felt a higher level of pressure from certain stakeholders than the compliant factories carries a significant implication for industry practitioners as well as policymakers. The initiation of the compliance procedure could have mainly been the result of the buyers’ pressure. However, internal forces such as workers and government (external to the factories yet domestic) seem to prolong the urgency and strengthen the legitimacy of workplace compliance as it has been reported that the internal stakeholders may not be as strong as buyers, yet they tend to influence substantial improvement in social initiatives (Roy et al., 2020). The sub-par status may have stimulated the attention of those stakeholders who, in turn, concentrated their pressures on the behind-schedule factories, possibly driven by their dissatisfaction with non-compliant factories. Because worker pressure tends to result in a substantive improvement beyond symbolic implementation (Meixell & Luoma, 2015; Roy et al., 2020), successful implementation of workplace safety by the behind-schedule factories could result in more meaningful compliance in practice.
Trade unions and other interindustry mechanisms along with the support from NGOs could strengthen the voices of workers to exert more effective influences. At this time, the Bangladesh government has promised practical means of unionization in preparation for the Accord’s phase-out (Accord, 2020). The findings of this study suggest that the transition to the government-controlled inspection may become more functional as it does have better access to interconnected means to support such as labor regulations or financing. However, we also suggest that because of the presence and the power NGOs have in Bangladesh, NGOs should be a part of the process by which workers are protected. Increased awareness and clear standards among stakeholders, especially the government and NGOs, are necessary to facilitate factory management as well as workers’ participation in workplace safety compliance.
The findings also carry significant implications for the stakeholder theory. The development of stakeholder theory in recent years has identified various stakeholder roles and procedures as well as their varied influences on different issues (Mani & Gunasekaran, 2018; Wang et al., 2020). Most studies, however, assume that social and environmental performance has a linear, positive relationship with stakeholder pressures (e.g., Mani & Gunasekaran, 2018; Meixell & Luoma, 2015; Sarkis et al., 2010; Venkatesh et al., 2021). The findings of this study indicate that the stakeholder pressures seem to change over time or may depend on the firms’ responses to the stakeholder demand in the process. The increased pressures could be the result of an unsatisfied level of factory responses to the stakeholder claims. A longitudinal empirical study could further explain this and establish its place in the stakeholder theory.
This study provides valuable information for practitioners as well as researchers. This study advanced our understanding of the roles of various stakeholders in workplace safety in Bangladesh. The industry practitioners and the policymakers from other developing and underdeveloped countries that have similar socio-economic backgrounds as Bangladesh can gain insights into implementing workplace safety during their industrial development process and help achieve their sustainable development goals. While developing countries lag in workers’ rights or welfare, proactive management of the workplace safety issue could be identified as an alternative, competitive strategy. Theoretically, we reported varied stakeholder influences across the factories with different levels of compliance, suggesting a non-linear nature of stakeholder influence. While the interest in the matter has been intensified since the mid-2010s, there has been no generalizable study that investigated the relationship between stakeholder pressures and workplace compliance in Bangladesh, primarily due to difficulties in gathering data. Our study is one of its kind where secondary data were used in the sampling process and matched with primary data.
Limitations and Future Research
It has been reported that the Accord and the Alliance have jointly inspected about 35% of apparel factories in Bangladesh (Mausumi & Rahman, 2018). There are many more factories that have not been inspected by the Accord and possibly have been continuing apparel production as sub-contractors. Factories that were not listed on Accord did not receive the survey. These include those who supply products to the Accord signatory companies or local sub-contractors. We investigated six prominent stakeholder forces. Future studies may address additional stakeholders such as international and national media.
It is imperative to mention that the response rate (12% after discarding invalid responses) of the survey was low, probably because of the sensitive nature of the topic. At least 13 recipients, after reading the research description on the consent page at the beginning of the survey, did not consent to participate in the survey. We do not know how many had left without indicating the consent decision. Although we tried to overcome the difficulties in data collection by using secondary data for the compliance data, the issue sensitivity seems to remain a barrier. We like to emphasize that due to the local situation, the data collection from ineligible factories was not possible, which prevented us from confirming wholesome relationships between the pressures and compliance statuses. We highlight the need for more empirical studies on the topic in developing countries so that research facilitates the welfare of the increasingly global supply chains and contributes to the achievement of the UN’s sustainable development goals.
Footnotes
Acknowledgments
This research was funded by the Patton College of Education.
Compliance with Ethical Standards
Ethical Approval: All procedures performed in this study was approved by the Institutional Review Board (IRB)
Informed Consent: Informed consent was obtained from all individual participants included in the study.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Patton College of Education Graduate Research Funding,
