Publications
Publications
- 2025
- HBS Working Paper Series
How Firms Respond to Worker Activism: Evidence from Global Supply Chains
By: Yanhua Bird, Jodi L. Short and Michael W. Toffel
Abstract
Social movement pressures can lead organizations to concede and improve social performance to avoid disruption costs, but we theorize that such responses evoke concession costs that prompt organizations to shift resources and attention from other social domains whose performance suffers. We test this theory by examining tradeoffs global supply chain factories make when responding to local worker activism, evidenced by varying compliance with multinational enterprises’ (MNEs’) labor standards. Analyzing audit data from thousands of Chinese suppliers, we find that suppliers in cities with more wage-related activism increased compliance with MNEs’ wage-related standards but tempered improvement in occupational health and safety. This tradeoff is more pronounced in factories with unions and high-powered productivity incentives, suggesting internal governance structures shape how suppliers respond to social movement pressures.
Keywords
Worker Activism; Labor Standards; Tradeoffs; Global Supply Chains; Internal Governance Structure; Public Opinion; Supply Chain; Corporate Accountability; Corporate Social Responsibility and Impact; Working Conditions
Citation
Bird, Yanhua, Jodi L. Short, and Michael W. Toffel. "How Firms Respond to Worker Activism: Evidence from Global Supply Chains." Harvard Business School Working Paper, No. 25-061, June 2025.