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Evaluating Strategies for Negotiating Workers’ Rights in Transnational Corporations: The Effects of Codes of Conduct and Global Agreements on Workplace Democracy

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Abstract

Following the offshoring of production to developing countries by transnational corporations (TNCs), unions and non-governmental organisations (NGOs) have criticised working conditions at TNCs’ offshore factories. This has led to the emergence of two different approaches to operationalising TNC responsibilities for workers’ rights in developing countries: codes of conduct and global agreements. Despite the importance of this development, few studies have systematically compared the effects of these two different ways of dealing with workers’ rights. This article addresses this gap by analysing how codes of conduct and global agreements both independently and interactively affect workers’ rights. We do this based on a qualitative study of the Sri Lankan operations of a Swedish TNC in Sri␣Lanka, and on interviews with union and NGO representatives actively involved in codes of conduct and global agreements. Our results indicate that global agreements independently address all the aspects included in codes of conduct, while also addressing additional, more process-oriented aspects of workers’ rights. Hence, on their own, global agreements seem to comprise the superior approach to promoting workers’ rights. Furthermore, our results indicate that promoting codes of conduct has negative interactive effects on global agreements. Based on these results, we argue that the current focus on codes of conduct is counterproductive for the promotion of workers’ rights.

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Acknowledgement

We gratefully acknowledge the support of Mats Wingborg in collecting data for this study.

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Authors and Affiliations

  1. Centre for Business in Society, School of Business, Economics and Law at Göteborg University, Box 600, Gothenborg, SE-405 30, Sweden

    Niklas Egels-Zandén

  2. Centre for People and Organization, Stockholm School of Economics, Box 6501, Stockholm, SE-113 83, Sweden

    Peter Hyllman

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  1. Niklas Egels-Zandén
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  2. Peter Hyllman
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Correspondence to Niklas Egels-Zandén.

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Niklas Egels-Zandén is a PhD student at the School of Business, Economics and Law at Göteborg University, Sweden. His areas of research are international business and coporate social responsibility, especially in relation to multinational corporations in developing countries. He has previously published in Journal of Business Ethics, Business Strategy and the Environment, and Journal of Corporate Citizenship.

Peter Hyllman is a research assistant at the Center for People and organization at the Stockholm School of Economics, Sweden. His areas of research are industrial relations, workplace democracy and employee relations, focusing on management-union relationships in transnational corporations.

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Egels-Zandén, N., Hyllman, P. Evaluating Strategies for Negotiating Workers’ Rights in Transnational Corporations: The Effects of Codes of Conduct and Global Agreements on Workplace Democracy. J Bus Ethics 76, 207–223 (2007). https://doi.org/10.1007/s10551-006-9269-0

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