Paper short abstract:

In this article, we examine ‘the factory manager dilemma’ as a way of conceptualizing the purchasing practices and environmental upgrading requirements faced by suppliers in their dealings with lead firms in global value chains. Specifically, we analyze the environmental upgrading challenges experienced by Pakistani apparel and textile firms.

Paper long abstract:

Economic and environmental upgrading in global value chains are inter-twined processes. The existing global value chain literature has so far articulated the relationships between economic and social upgrading, but has only recently started to explore the challenges of environmental upgrading from the perspective of suppliers in the global South. In this article, we examine ‘the factory manager dilemma’ as a way of conceptualizing the purchasing practices and environmental upgrading requirements faced by suppliers in their dealings with lead firms in global value chains. Specifically, we analyze the environmental upgrading challenges experienced by Pakistani apparel and textile firms. We conclude that engaging in environmental upgrading has become necessary for local suppliers to secure and maintain access to global value chains. This generates reputation enhancement for lead firms but undermines the financial viability of suppliers. In other words, global South suppliers are required to both absorb the consequences of global buyers’ unsustainable purchasing practices and reduce their own profitability – all in the name of sustainability.