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


Islam, MA and Deegan, C and Gray, R, Social compliance audits and multinational corporation supply chain: evidence from a study of the rituals of social audits, Accounting and Business Research, 48 pp. 190-224. ISSN 0001-4788 (2018) [Refereed Article]

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Copyright 2017 Informa UK Limited, trading as Taylor & Francis Group

DOI: doi:10.1080/00014788.2017.1362330


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.

Item Details

Item Type:Refereed Article
Keywords:social compliance audits, surrogate accountability, supply chain, developing nations
Research Division:Commerce, Management, Tourism and Services
Research Group:Strategy, management and organisational behaviour
Research Field:Corporate governance
Objective Division:Expanding Knowledge
Objective Group:Expanding knowledge
Objective Field:Expanding knowledge in commerce, management, tourism and services
UTAS Author:Deegan, C (Mr Craig Deegan)
ID Code:138352
Year Published:2018
Web of Science® Times Cited:24
Deposited By:Accounting and Accountability
Deposited On:2020-04-02
Last Modified:2020-05-22

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