|
Field
Abstract
|
Before
The Rana Plaza collapse in 2013 exposed the limitations of conventional models of private regulation of social compliance in global supply chains, which rely on multinational corporations to implement supplier codes of conduct and periodic audits. The growing complexity of globally dispersed multi-tier supply chains limits the ability of multinational enterprises to effectively monitor and influence all upstream suppliers, particularly those beyond direct suppliers, where the most severe human rights violations often take place. To mitigate reputational and financial risks, lead firms delegate the responsibility of monitoring sub-suppliers to direct suppliers, who face conflicting demands to minimize costs while ensuring social compliance. This study explores how first-tier suppliers’ perceptions of fairness and reciprocity influence their efforts to ensure social compliance within their own operations and among their sub-suppliers. We implement a novel online experiment with approximately 400 participants in South Africa, simulating a multi-tier supply chain involving a lead firm (Alpha), a first-tier supplier (Beta), and a second-tier supplier (Gamma). Participants assigned to Beta are randomly assigned to one of three treatment conditions that vary the framing of Alpha’s social compliance demands and the type of incentives for suppliers to comply. We test whether Beta allocates more effort to monitoring Gamma and whether Beta’s compliance improve when Alpha’s demands are framed in a more collaborative and procedurally fair manner, and when such framing is combined with monetary incentives.
|
After
The 2013 Rana Plaza collapse exposed the limits of private regulatory models that rely on multinational corporations to enforce supplier codes of conduct through audits. In today’s complex, multi-tier global supply chains, lead firms often lack visibility beyond their direct suppliers, where the most severe labor violations tend to occur. To manage reputational and financial risks, buyers increasingly delegate the task of monitoring sub-suppliers to first-tier suppliers, who face competing pressures to reduce costs while ensuring social compliance. This study examines how perceptions of fairness and reciprocity influence first-tier suppliers’ efforts to uphold labor standards within their own operations and among sub-suppliers. We implement a novel online experiment with over 500 South African participants, simulating a three-tier supply chain with a lead firm (Alpha), a first-tier supplier (Beta), and a second-tier supplier (Gamma). Participants assigned to Beta are randomly allocated to one of three treatment conditions that vary the framing of Alpha’s compliance demands and the presence of financial incentives. We test whether Beta increases monitoring of Gamma and improves compliance when Alpha adopts a more collaborative, procedurally fair approach, with and without monetary incentives.
|
|
Field
Trial End Date
|
Before
November 30, 2025
|
After
March 31, 2026
|
|
Field
Last Published
|
Before
April 03, 2025 01:03 PM
|
After
July 05, 2025 05:04 AM
|
|
Field
Intervention (Public)
|
Before
This study investigates how different communication strategies from a lead firm (buyer) affect a supplier’s decisions regarding compliance with labour standards and the monitoring of upstream subcontractors in a stylised multi-tier global supply chain framework. The intervention varies the way compliance expectations are communicated, focusing on whether the message is framed in a more collaborative and fair manner and whether it is accompanied by a monetary incentive. The aim is to assess how such strategies influence supplier behaviour related to upstream monitoring effort and own compliance performance.
|
After
This study investigates how different communication strategies from a lead firm (buyer) affect supplier compliance behaviour within a stylized, multi-tier global supply chain. Specifically, we examine how variations in the framing of compliance expectations – focusing on collaboration, procedural fairness, and the presence or absence of monetary incentives – influence suppliers’ compliance decisions. The intervention manipulates the tone and content of compliance messages from the buyer to assess their effects on two key outcomes: the supplier’s effort to monitor upstream subcontractors and their own compliance performance.
|
|
Field
Primary Outcomes (End Points)
|
Before
In the experiment, participants take on the role of a supplier responsible for completing a production order, complying with labour standards, and deciding how much effort to invest in monitoring a subcontractor. The primary outcomes are designed to capture key aspects of the supplier’s behaviour under different treatment conditions. These include: 1) The amount of time (in seconds) the supplier allocates to monitoring subcontractors, as determined by their selected inspection policy; 2) The supplier’s performance on the compliance task (operationalised as a transcription task).
|
After
Participants are assigned the role of a first-tier supplier responsible for: 1) Completing a production task; 2) Ensuring compliance with labor standards, and 3) Choosing how much effort to invest in monitoring their upstream subcontractors. We define two primary outcome measures: 1) Monitoring effort, measured as the number of seconds the participant allocates to subcontractor inspection, as determined by their selected inspection policy; 2) Compliance performance, measured by the number of correctly transcribed items in a compliance-focused (transcription) task.
|
|
Field
Experimental Design (Public)
|
Before
The study uses an online experiment with participants recruited from the general working population in a sourcing country. Participants take on the role of a supplier who must allocate limited resources across multiple tasks, including production, compliance with labour standards, and oversight of an upstream subcontractor. Participants are randomly assigned to one of three experimental conditions, which vary how compliance expectations are communicated by the downstream partner (lead firm or buyer). The treatment arms differ in message framing and the presence or absence of a monetary incentive. To ensure realism and consistency in the experimental setting, decisions by upstream and downstream actors are collected in advance and matched ex post with participants in the main experimental role.
|
After
We conduct a randomized online experiment with participants drawn from the general working population in a country representative of sourcing environments. Each participant takes on the role of a first-tier supplier responsible for allocating limited time across production, compliance, and monitoring tasks. Participants are randomly assigned to one of three treatment conditions, which vary how compliance expectations are communicated by the lead firm. The treatment arms differ in message framing (traditional vs. collaborative) and in the inclusion of a monetary incentive for reporting non-compliance by subcontractors. To ensure consistency and realism, decisions made by upstream and downstream actors (e.g., the buyer or subcontractor) are collected in advance and matched to participants ex post during the main experiment. Randomization is implemented by Prolific at the individual level, with equal probability of assignment to any treatment group.
|
|
Field
Randomization Method
|
Before
The randomisation will be implemented by Prolific, and participants will have an equal probability to be assigned to any treatment group.
|
After
The randomisation is implemented by Prolific, and participants have an equal probability to be assigned to any treatment group.
|
|
Field
Planned Number of Observations
|
Before
Approximately 400 individuals.
|
After
A total of 561 individuals were recruited via Prolific, 427 of whom played the main role of first-tier suppliers.
|
|
Field
Sample size (or number of clusters) by treatment arms
|
Before
Approximately 100 individuals per treatment arm (100 individuals in control, 100 individuals in treatment with framing only, 100 individuals in treatment with both framing and monetary incentive).
|
After
Approximately 135-145 individuals per treatment arm (136 individuals in control, 144 individuals in treatment with framing only, 147 individuals in treatment with both framing and monetary incentive).
|
|
Field
Secondary Outcomes (End Points)
|
Before
In order to better understand the mechanisms that lie behind the results, we will elicit participants’ perceptions of fairness of the social compliance demands once all tasks are completed. This secondary outcome will be measured using a 10-point Likert scale, ranging from 1 (completely disagree) to 10 (completely agree).
|
After
To investigate potential mechanisms, we will measure participants’ perceptions of fairness in relation to the compliance expectations communicated by the buyer. This will be assessed post-task using a 10-point Likert scale ranging from 1 (“completely disagree”) to 10 (“completely agree”) in response to a statement regarding perceived fairness. This outcome helps evaluate whether collaborative framing alters suppliers’ normative responses.
|