Inhospitable accessibility and blurred liability: Institutional voids in an emerging economy preventing supply network transparency

Abstract

Research on supply network transparency is incipient and focused on how focal firms can improve monitoring of supplier misbehavior. This narrow focus has restricted advancements in the topic. Our research, firstly, shifts the focus from supplier to focal firm misbehavior, and secondly, focuses on Brazil as an exemplar of an emerging economy. We explore how institutional voids influence supply network transparency. We focus on how voids in regulation, labor market, and contracting systems provide fruitful land for buyer misconduct and undermine supply network transparency. We review legislation in five developed countries to contrast with legislation in Brazil and we synthesize six years of Brazilian law suits regarding outsourcing issues in the apparel sector. This study exposes that voids can ease pressures allowing firms to navigate ‘below the radar’ and sustain poor working conditions along the supply network. Within this context, society has limited information availability and accessibility — what we label inhospitable accessibility (due to the regulatory void), as well as limited proportionality between real risks in the supply network and traceability of those risks back to the buying firm — what we label blurred liability (due to voids in labor market and contracting systems), thus preventing supply network transparency.