Global Business Models and the Social Responsibility of Multinational Enterprises : Challenges and Solutions

In this chapter, we focus on the social responsibility of MNEs, not denying the severity of environmental issues arising with global business conduct. These so-cial issues often arise not for MNEs' own employees or their downstream cus-tomers, but for workers employed with independent suppliers along MNEs' up-stream GVCs. The literature on business models refers to these upstream GVCs as the ‘architecture of value creation' (Teece 2010; Osterwalder/Pigneur 2010). The architecture of value creation is a crucial part of business models and consti-tutes the precondition for marketable products and services (Teece 2010; Kreikebaum et al. 2018). The literature on business models defines the architec-ture of value creation as consisting of three building blocks: key partners, key resources, and key activities (Kreikebaum et al. 2018; Osterwalder/Pigneur 2010). Together, these three building blocks of business models result in large parts of the costs a firm has to face and thus constitute one important side of the busi-ness model (Osterwalder/Pigneur 2010). This chapter focusses on the architecture of value creation as a sub-aspect of business models and examines the social responsibility of MNEs resulting from a globalized architecture of value creation. We map out challenges and solutions, name practical examples, and consider context-specific conditions. While in some industries, such as the automotive or the airline industry, global business models have only marginally led to a detona-tion of wages and working conditions for workers, in other industries precarious circumstances for workers are everyday reality. In this chapter, we focus on the ladder industries, where so-called ‘captive chains' are common (Gereffi et al. 2005). Captive chains describe circumstances of severe power imbalance be-tween buyers and suppliers along GVCs. Examples include GVCs in the textile, shoe, toys, and electronics industries (Gereffi et al. 2005). In order to deliver a focused and detailed account and illustration of the challenges and solutions arising with MNEs' global architecture of value creation, we draw on examples from the textile industry, which in the past has been subject to an intensive de-bate on social responsibility of MNEs. Therefore, this particular industry offers a rich variety of practical examples of MNEs facing social challenges and imple-menting solutions and thus serves as an illustration of our analysis