Beneth corporate codes of conduct : what drives compliance in two Mexican garment factories

Abstract

This thesis addresses the question: under what conditions do corporate codes of conduct work? To answer this question, I develop two case studies of subcontracting factories that are subject to a multinational company's (MNC) code of conduct. These two factories have many similarities-both are in Mexico, both are in the apparel industry, and both produce for the same MNC. In addition, on the surface, they appear to have similar labor practices. They have comparable policies vis-à-vis their workers in terms of recruitment, promotion system, grievance system, and benefits. However, upon conducting fieldwork at the plants, I found that, despite similarities on paper, there are significantly differences in actual labor conditions. One factory complies with the code of conduct and the other does not. I argue that the code of conduct, and other similar policies, are "filtered" by the management, which results in different labor conditions. Four factors influence the way managers treat their workers and interact with the MNC external labor markets, product markets, cultural and language conditions inside the plants, and values of management. These factors influence the management style of the plants and their relationship with the MNC, which result in different implementation of the same policies, and, in turn, different labor conditions.