Dr Pinnington and Professor Meehan have been at the forefront of research on modern slavery in corporate supply chains since 2017.
The authors take a sensemaking perspective to examine how managers make sense of the different sources of instruction and advice, in the complex context of global supply chains, and how this affects their action-related decision making.
Key findings:
- Managers adopt a position through which they justify a lack of action, to themselves and to others. We call this stance convenience framing. Through this reasoning, managers on the one hand adopt a moral stance and express support for the aims of legislation and the need for a corporate response, but on the other hand, defer or avoid acting now.
- Analogies with the long period over which the UK health and safety legislation (H&S) and regulatory regime were developed, illustrate the foundation of managers’ thinking. All managers accept that H&S is mandatory and that serious consequences will result from breaches. Managers expect that modern slavery legislation will eventually achieve a similar level of legitimacy, at which point they will invest fully in complying.
- For now, managers believe that they face competing (paradoxical) requirements to achieve sustainability aims whilst also maximising profit. Through business-case logic, financial objectives always dominate, but this dominance can be challenged through a combination of stronger legislation, and a more strategic response to the broadening body of international legislation.
- A more strategic response would identify operational and compliance advantages from increasing a firm’s knowledge and engagement with its supply chains, enabling coordinated action and reporting against a broad range of non-financial reporting requirements, including environmental and human rights sustainability.
Modern slavery and corporate supply chains
Modern slavery is an ‘umbrella term’ that includes human trafficking, forced labour, forced criminality, debt bondage and organ trafficking. Latest global figures for 2021 estimate that 27.6 million people were in situations of forced labour, with reported incidences in the UK showing a 33% increase in 2021 according to NRM figures.
What are the current requirements for firms?
- The statutory reporting requirements are laid out in the UK Modern Slavery Act 2015 (Section 54: Transparency in Supply Chains (TISC)).
- Firms with a turnover exceeding £36m must submit an annual report on the steps they have taken to eradicate modern slavery in their supply chains.
- Guidance on what to include in these reports is provided by the Home Office and various NGOs.
- International firms now have similar obligations in other jurisdictions (e.g. Australia and Canada) as well as other related requirements, such as Human Rights Due Diligence (HRDD) legislation emerging across Europe, and forced-labour import bans in North America.
- Collectively, the broadening reach of this legislation will mean that firms will face increasing pressure to show that they are taking, and reporting, serious endeavours to eradicate human rights abuses, globally.
Understandings managers’ perspectives on TISC
Research in this area, including our own, has previously focused on compliance with Section 54 reporting standards. In this study we consider managers’ perspectives on the challenges firstly, of achieving true transparency in supply chains, and secondly, in finding and addressing instances of modern slavery. We interviewed 32 managers within three large companies in the construction sector.
From the interviews, it was evident that managers were having to make sense of conflicting priorities, trying to make some progress toward addressing modern slavery whilst not adversely impacting profit. The theory of ‘sensemaking’ was therefore identified as a useful way of understanding the processes underpinning mangers’ responses.
What is sensemaking?
Sensemaking describes the processes through which people analyse complex situations and decide how to respond. The process is cyclic and involves reflection on, and justification of, earlier actions, as well as decision-making on future action. When trying to make sense of complex situations, people typically prioritise plausible explanations above accuracy. Sensemaking is impacted by human limitations on dealing with complexity so instead they construct simplified models that approximate to a situation, or they use analogies to other comparable situations with which they are familiar. Each of these aspects of sensemaking can reduce the scope, accuracy and effectiveness of responses to a situation.
How do managers ‘make sense’ of modern slavery?
The study revealed that managers’ simplification processes reduced the breadth of their vision, such that they narrowed where they looked for modern slavery issues.
Managers also used analogies with health and safety legislation to justify a lack of immediate action. In making these analogies managers referred to the strength of current health and safety legislation and referred to the lengthy period over which it evolved. Managers expect modern slavery reporting legislation will be progressively strengthened over many years, and intend to act when it does.
In the meantime, however, managers justify that they and their businesses are ethical, by supporting the ideals behind current legislation, and a future intention to take more action.
We call this mental model convenience framing. Managers rationalise a plausible position in which they transfer responsibility for further action back to legislators. Arguments are also supported by plausible explanations of the impact of narrow margins in the sector.
Convenience framing
Managers adopt a position through which they justify a lack of action, to themselves and to others. We call this stance convenience framing. Through this reasoning, managers on the one hand adopt a moral stance and express support for the aims of legislation and the need for a corporate response, but on the other hand, defer or avoid acting now.
... and we’re [construction industry] almost like: “we’ll react once someone enforces it”. I do think the Government has got to make us do stuff. I think we’re an industry that, once an accident happens, or something major happens, we’ll think we better do something now ... normally that is led by the Government, just as we’re seeing with Grenfell.
This is often justified through emphasising the difficulty of action, diluting the responsibility of the company to take meaningful action.
... but everyone’s stretched ... we can only go so far in terms of probing and asking questions and you might uncouple one or two instances, but it’s the difficulty of what do you do next? How do you eradicate that? We haven’t got enough people to be out there all the time checking everybody.
Health and safety
Analogies with the long period over which the UK health and safety legislation (H&S) and regulatory regime were developed, illustrate the foundation of managers’ thinking. All managers accept that H&S is mandatory and that serious consequences will result from breaches. Managers expect that modern slavery legislation will eventually achieve a similar level of legitimacy, at which point they will invest fully in complying.
“An example that everyone would use would be health and safety. If you went back 50 years, there was more freedom ... every- thing has changed now. “
“People don’t even think about it, you know ... they automatically put on the boots, put on the hat, put on the hi-vis, and I think that that was really generated by, apart from a certain amount of conscience, it was also legislation ... and I think [that’s] the only thing that’s really going to change modern slavery.”
Paradoxical sensemaking
For now, managers believe that they face competing (paradoxical) requirements to achieve sustainability aims whilst also maximising profit. Through business-case logic, financial objectives always dominate, but this dominance can be challenged through a combination of stronger legislation, and a more strategic response to the broadening body of international legislation.
“In terms of business integrity, modern slavery and all the other things, if we could turn that in to a proper selling point, that customers actually held dear, and actually influenced their decision-making, I think the world would be a better place. “
Where managers were able to transcend convenience framing and address the paradox or tension they were facing, opportunities to transcend the paradox and develop new ideas could emerge.
Strategic responses
A more strategic response would identify operational and compliance advantages from increasing a firm’s knowledge and engagement with its supply chains, enabling coordinated action and reporting against a broad range of non-financial reporting requirements, including environmental and human rights sustainability.
“to be sure, we should put boots on the ground ... go and physically see our production facilities ... practically you cannot do that, our supply chain is too big.”
“A policy is great, but a policy is just a set of words. If people aren’t living it, then it doesn’t mean anything.”
Conflicting sustainability and financial objectives
Whilst managers in this study expressed strong support for initiatives to tackle modern slavery, equally they were very aware of low margins in the sector and therefore of the need to control costs. The analogy with health and safety was especially interesting in this context: no one today considers cost cutting in relation to health and safety, however firms believe their competitors face similar costs. In the absence of stronger legislation sustainability objectives and financial objectives are considered to be incompatible, resulting in under-investment.
The full (open source) academic paper is available from the publishers:
https://doi.org/10.1111/jscm.12309
An author version is available on request.
Using this research
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Research Team
Senior Lecturer in Service Management, Faculty Research Theme Lead for Slavery and Unfree Labour, Operations and Supply Chain Group
Professor of Responsible Procurement and Director of the Centre for Sustainable Business, Operations and Supply Chain Group
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