More Than Meets the Eye: Misconduct and Decoupling Against Blockchain for Supply Chain Transparency

Abstract

The fashion industry has consistently ranked high in terms of its association with modern slavery. While scandals like the Rana Plaza incident have focused the world's attention on Asia, in Brazil, over 35,000 people have been rescued from conditions analogous to slavery in the past 15 years. Outsourcing and the underlying social structures that blur the implementation of outsourcing are central to this problem. Fashion supply chains are highly fragmented and labour intensive, exhibiting power asymmetry and informality. Although supply chain research has focused on how focal firms can control or improve supplier practices, this study examines focal firm misconduct and decoupling. Our research presents an intervention aimed at developing a blockchain solution to create a census of fashion working conditions in Brazil. The project included two non-governmental organisations, two fashion brands and their suppliers, the fashion retail association, a blockchain start-up and the research team (18 organisations). We contribute to both theory and practice, revealing that the blockchain's potential to ease transaction costs is outweighed by governance costs related to third-party supervision. We show that focal firms justify unfair purchasing practices via victimisation and diverting attention from themselves to consumers (‘unwilling to pay’) and suppliers (‘not behaving as expected’), unveiling how these drivers of organisational misconduct lead to supplier decoupling (means–end) and focal firm decoupling (policy–practice). Such underlying social structures sustain inaction or, at best, advance focal firms’ visibility of their supply chains while offering no true transparency to the broader society.