Dhaka, Bangladesh (BBN)-Nearly a year after the Rana Plaza factory collapse killed more than 1,100 garment workers, we continue to look for ways to improve working conditions in developing countries like Bangladesh.
Private sector social auditors add a valuable layer of oversight, determining which suppliers remain eligible to receive client orders, reports The Guardian.
But until recently, little has been known about what influences their decisions.
These auditors assess the extent to which factories in developing countries adhere to codes of conduct set by multi-national corporations to address workplace conditions.
However, the system clearly has shortcomings.
These were tragically apparent in 2012 and 2013 when private sector social auditors approved conditions at the Tazreen Fashions factory in Bangladesh and at a garment factory in Karachi, Pakistan, before separate fires killed hundreds.
In the context of government regulations, academic research has shown that the enforcement practices of individual inspectors vary substantially, and that their interpretations determine how rules actually influence company behaviour.
Do individual auditors in the private sector hold similar sway over the codes of conduct put forth by brands?
Together with Jodi Short at UC Hastings College of Law and Andrea Hugill at Harvard Business School, I analysed data from nearly 17,000 private sector audits that occurred during 2004-2009.
The audits, conducted by one of the largest social auditing firms in the world, took place at nearly 6,000 factories producing consumer goods – in most cases garments – in more than 50 countries, including Bangladesh.
The study compared audits conducted by different teams at the same factories.
Social auditors are supposed to provide unbiased assessments of factory conditions. However, we found audit results are influenced by several factors.
THE STAFFING OF AUDITORS
Prior studies of cognitive constraint have shown there are limits to the number of issues individuals can focus on.
This led us to suspect that audit teams returning to the same factory would be more likely to focus on the same set of issues they previously identified – the ones factories most likely addressed.
As a result, we thought subsequent audits conducted by the same teams would find fewer violations than audit teams whose members are entering a factory for the first time.
Our research results confirmed this intuition.
We found supply chain audits result in fewer overall violations citations when even a single member of the audit team participated in an earlier audit of the same facility.
This effect was especially pronounced for citations of emergency preparation, such as failing to keep aisles clear and ensuring adequate emergency exits and lighting.
These results suggest managers should ensure that auditors are rotated regularly to keep a fresh set of eyes on working conditions.
THE INFLUENCE OF GENDER
Auditing companies seldom consider gender when creating audit teams.
Yet social auditors are often deployed to assess the working conditions of factories where workers are predominantly female.
Our anecdotal evidence suggests female workers are more willing to talk openly with women auditors, making it more likely they will share information about poor working conditions.
Furthermore, our interviews revealed instances where female auditors conducted more thorough records reviews.
Numerous sociological studies from the past half-century have noted that women in bureaucratic organisations are more likely to "go by the book" than men, and that gender diversity often leads to improved team performance.
Women and men have been shown to have different perceptual styles that may help them identify different types of violations.
Our analysis showed auditing teams with at least one woman cited significantly more violations overall.
Audit teams that included women were more likely to flag violations of minimum wage and working hour standards as well as the presence of forced or compulsory labor – the very types of violations that thorough records reviews are especially likely to uncover.
EXPERIENCE IS A GOOD THING … MOSTLY
Specialised auditor training teaches auditors how to detect violations.
Not surprisingly perhaps, we found that teams consisting of more highly trained auditors do cite more violations. However, the benefit of auditor experience – measured in years on the job – isn't as straight-forward.
Audit teams with greater experience cited more violations, but at a decreasing rate.
Our interviews with audit managers shed some light on the cause. They explained that auditors exhibit "massive improvement" during their first few years, as they learn "tricks of the trade" that allow them to detect violations.
For instance, they learn to search for clues that a factory employs child labor, even when no children are discovered on site during an audit.
But over time, auditors learn fewer new tricks and thus the marginal benefits to experience taper off.
QUESTIONS FOR YOUR AUDITING FIRM
Understanding supplier practices and risks requires more than just hiring the right social auditing company.
It means working with the social auditor to ensure audit teams are assembled to maximise their ability to discover and report violations.
Interestingly, the companies we've spoken with are largely unaware of how their staffing decisions affect audit reports.
BBN/ANS/AD/10Apr14-8:40 pm (BST)