The Transparent Supply Chain: From Resistance to Implementation at Nike and Levi-Strauss

Abstract

Information disclosure is a common regulatory tool designed to influence business behavior. A belief is that transparency can provoke learning and also positive institutional change by empowering private watchdogs to monitor and pressure business leaders to alter harmful behavior. Beginning in the late 1990s, a private movement emerged that pressured corporations to disclose the identify of their global supplier factories. These activists believed that factory disclosure would lead to greater accountability by corporations for the working conditions under which their products are made, which in time would improve labor practices. In 2005, Nike and Levi-Strauss (Levis) surprised the business community by publishing their supplier lists. This paper describes case studies of Nike and Levis, tracking the evolution from resistance to supply chain transparency through to the decision to be industry leaders in factory disclosure. The paper evaluates the contribution of factory disclosure and proposes that other companies should be urged to move toward supply chain transparency.

Keywords: labor practices, Nike, Levi-Strauss, multinational apparel companies, factory list disclosure, regulation

JEL Classification: J38, J50, J51, J58, K20, K31, M14, P33