Procurement Capabilities and Supplier Social Standard Compliance

This study investigates the influence of a buyer’s procurement capabilities on suppliers’ compliance with the three most pressing labor issues: working time, compensation, and health and safety. The findings suggest that supplier selection positively influences the upholding of working time and compensation requirements at suppliers’ sites while supplier development has no significant effect on suppliers’ compliance with any of the three social concerns. Health and safety is not affected by any of the procurement capabilities which may explain why suppliers often do not achieve full compliance with a social standard despite that buyers increasingly invest resources for this purpose.