Institutional Context and Conflicts of Interest in Global Value Chains: A Review from Critical Management Studies

AMATO, CELINA NOÉ; PERETTI, MARÍA FLORENCIA; BURASCHI, MÓNICA

Bogotá

Conferencia; II Qualitative Research and Critical Accounting (QRCA) 2019: A Latin American Conference; 2019

Universidad Nacional de Colombia

A growing interest in incorporating sustainability criteria throughout the value chain is evident in literature and in the business world. Sustainability is understood in this field as the balanced management of the economic, social and environmental dimensions in the company, in line with what is proposed by the Triple Bottom Line [TBL] (Elkington, 1997, 2004). This three-dimensional management extends to activities carried out by other links in the chain, even beyond national boundaries.The Global Value Chain [GVC] Theory (Sturgeon, 2013; Gereffi, Humphrey & Sturgeon, 2005; Kaplinsky & Morris, 2000) seeks to explain or predict how the different value aggregation nodes of a productive activity are linked within a territorial-spatial economy. This approach is useful to analyze firms from developing countries that insert themselves into global chains as suppliers of inputs and parts, and that must adapt to the sustainability criteria imposed by leading firms, often located in developed countries. This situation has been addressed in the literature through the concepts of governance -distribution of power within the chain- (Gereffi, 2014; Ponte & Gibbon, 2005) and upgrading -improvement of economic, social and environmental performance (Barrientos, Gereffi & Rossi, 2010; Gereffi & Lee, 2016).The GVC approach has gained a prominent place on the research agendas of international organizations in order to highlight the benefits of trade liberalization for developing countries (Dalle, Fossati and Lavopa, 2013; Santarcángelo, Schteingart and Porta, 2017). From the economic point of view, according to the traditional postulates of this theory, the mere participation in a GVC is enough to produce an upgrading in the companies belonging to developing countries, improving the growth perspectives of those countries (Organization for Economic Cooperation and Development [OECD], 2013; United Nations Conference on Trade and Development [UNCTAD], 2013). However, these postulates have been questioned from the sustainability standpoint, since the GVC literature itself has recognized that upgrading does not occur automatically in the social and environmental dimensions (Barrientos et al., 2010; Bernhardt & Milberg, 2011; Gereffi & Lee, 2016). Hence the interest arises to integrate other theoretical approaches that allow a better understanding of the way in which sustainability criteria are adopted and transmitted throughout the GVC, resulting in environmental and social, as well as economic, upgrading.The research project conducted by the authors of this paper proposes the incorporation of elements from the Institutional Theory (Di Maggio & Powell, 1983) and the Stakeholder Theory (Freeman, 1984) to the traditional approach of GVC Theory, in order to understand the incidence of institutional context and conflicts of interest among stakeholders in the possibilities that local organizations have for achieving higher levels of sustainable performance in GVC.Institutional Theory focuses on the influence of external pressures on organizational activities (Hirsch, 1975). In this process, Di Maggio and Powell (1983) identified three types of drivers that influence organizations, called coercive, normative and mimetic isomorphisms. On this basis, some GCV theorists have sought to explain how these isomorphisms influence the adoption of sustainable practices in the chain (Grob & Benn, 2014).On the other hand, Stakeholder Theory (Freeman, 1984), openly acknowledges the existence of conflicting interests and has been widely used to explain the pressures that companies face in the adoption of sustainable practices throughout their value chain (Bansal & Song, 2017; Maignan & Mc Alister, 2003). Despite the profuse production of this stream, it is argued that there are still significant research opportunities for papers that adopt an international approach to Stakeholder Theory in a world dominated by globalized value chains (Sarkis, Zhu & Lai, 2011).This presentation explores the possibilities for integrating the Critical Management Studies [CMS] approach into the analysis. In this way, the aim of this work is conduct a literature review of critical publications that address the theoretical approaches mentioned above (GVC Theory, Institutional Theory and Stakeholder Theory) in order to identify some elements that can contribute to a better understanding of the way in which sustainability criteria are adopted and transmitted in developing-country companies that are part of GVC.The methodology used for this purpose was an oriented literature review,, through which scientific article linked to each theoretical approach s were selected from critical journals, such as Critical Perspectives on Accounting, Critical Perspectives on International Business, Critical Perspectives on International Public Sector Management, Critical Sociology, among others.This paper is structured as follows: first the CMS are introduced; the, the three proposed theoretical approaches are addressed from the CMS perspective; and afterwards the results are presented in an integrative table. Finally, some conclusions and possible future lines of research are suggested.