Downstream businesses that utilize global suppliers frequently use auditing programs to monitor their suppliers’ working conditions and are often deployed to address reputational concerns associated with procuring from unregulated suppliers. Despite their widespread use, it is unclear how audit program design decisions influence the effectiveness of those programs. My research explores features of audit programs that may affect program effectiveness.
First, I document the audit quality effects of four different auditor sourcing strategies. Using proprietary data from a global apparel brand, I find that insourced auditors yield higher quality audits, by recording more audit violations, than those done by outsourced auditors, and that third-party audit quality increases with the use of concurrent sourcing or rotational sourcing.
I also explore how differences in audit format can influence audit quality in the context of management system standard audits. This research finds that audits are of lower quality (resulting in fewer violations) when conducted remotely than when conducted in-person, possibly because remote auditors face greater difficulty obtaining information to document violations. It also finds that the remote audit quality decrement increases with multi-auditor teams and decreases when teams have more prior in-person site visits.
Finally, I identify two aspects of the buyer-supplier’s economic relationship that may influence the resolution of violations in supplier working conditions. I finds that the odds of violation resolution increase when a greater portion of supplier output goes to the buyer that is auditing them, and when there are more alternative suppliers for the buyer to choose from.
First, I document the audit quality effects of four different auditor sourcing strategies. Using proprietary data from a global apparel brand, I find that insourced auditors yield higher quality audits, by recording more audit violations, than those done by outsourced auditors, and that third-party audit quality increases with the use of concurrent sourcing or rotational sourcing.
I also explore how differences in audit format can influence audit quality in the context of management system standard audits. This research finds that audits are of lower quality (resulting in fewer violations) when conducted remotely than when conducted in-person, possibly because remote auditors face greater difficulty obtaining information to document violations. It also finds that the remote audit quality decrement increases with multi-auditor teams and decreases when teams have more prior in-person site visits.
Finally, I identify two aspects of the buyer-supplier’s economic relationship that may influence the resolution of violations in supplier working conditions. I finds that the odds of violation resolution increase when a greater portion of supplier output goes to the buyer that is auditing them, and when there are more alternative suppliers for the buyer to choose from.