Confronting the Business Models of Modern Slavery

Abstract

Despite growing attention from companies and regulators looking to eradicate modern slavery, we know little about how slavery works from a business perspective. We address this gap by empirically examining innovations in the business models of modern slavery, focusing on how the business models of slavery in advanced economies have evolved since slavery was legally abolished. While continuities exist, novel business models have emerged based on new actors, activities, and linkages. We categorize these as four innovative models per actors involved (producer/intermediary) and how value is created and captured (revenue generation/cost reduction), and discuss implications for research, policy, and practice.

The role of psychological distance in organizational responses to modern slavery risk in supply chains

“…Their impression of MSRM was that it could be designed similarly to labor management approaches that they understood – such as providing a hotline for exploited workers, or expecting workers to have access to a HR department. These options reflected a broad lack of experience with informal labor systems (Crane et al, 2021). Overall, group 1 demonstrated limited knowledge of the complexities of modern slavery risk, or the circumstances in which labor abuses might occur.…”

“…Modern slavery's critical challenges lie in its opaqueness relative to other types of risk, its roots in vulnerable workers and their communities, and the complex ways in which it is sustained (ILO, 2020; Crane et al, 2021; Stevenson, 2021). A key focus of how we educate organizations about modern slavery risk should be how risk intersects with exploited workers.…”

“…Exploited individuals are in highly precarious positions in which their freedom, and security is tied to their employment. This prevents them from disclosing their situation or the situations of others (Stevenson, 2021; Crane et al, 2021). As a result, firms' best and most expensive efforts to detect risk are being undermined because they are insensitive to workers' integral role in modern slavery risk.…”

“…Contextual factors drive and sustain modern slavery risk: workers' debt or their fear of deportation, are among the many factors that result in worker silence (Stevenson, 2021). Other challenges include the reliance of exploitative employers on wage theft, which motivates them to use practices designed to avoid detection such as bribery of auditors (Crane, LeBaron, Phung, Behbahani & Allain, 2021; LeBaron, 2021). Most firms also fail to appreciate that exploitation is difficult to ‘find’ given it exists mostly in the informal economy, and/or impacts low‐skilled or low‐valued categories of workers (Belser, de Cock & Mehran 2007; Segrave, Milivojevic, & Pickering, 2017; LeBaron, 2019).…”

Change in Rhetoric but not in Action? Framing of the Ethical Issue of Modern Slavery in a UK Sector at High Risk of Labor Exploitation

“…Modern slavery as a management topic was popularized by Crane ( 2013 ), who conceptually linked macro-institutional conditions to firm-level capabilities that help companies reap the benefits of modern slavery, despite such practice being largely illegal and widely regarded as illegitimate. Seeking to explain the “business of modern slavery” (Phung & Crane, 2018 ), scholars have shown its continuity from traditional slavery (Crane et al, 2021 ) and have started to unpack the workings of business models of forced labor (Allain et al, 2013 ).…”