Labor, Risk and Uncertainty in Global Supply Networks – Exploratory Insights

Abstract

Arising from widespread outsourcing and, in particular, offshoring, goods and services are increasingly provided by supply networks that rely on global logistic systems. While the risks and uncertainties involved in this strategy have been widely acknowledged in the literature on interorganizational networks and supply chain management, labor conditions and labor relations – and related human resource management issues – have thus far been neglected. Starting from a perspective that takes into consideration that global supply networks are not only confronted with calculable risks but also genuine uncertainties, we explore the conditions under which labor may constitute a source as well as a means for dealing with risk and uncertainty. The study is based on a review of the relevant inter-organizational network and supply chain management literature and is informed by an investigation of International Framework Agreements (IFAs) in ten European corporations and their supply networks. IFAs – in addition to unilateral codes of conduct – could be used to detect and cope with labor-related risk and uncertainties. However, our findings reveal that this is not the case. This leads to some tentative theoretical conclusions and implications for dealing with risk and uncertainty in global supply networks.