This study discusses how and whether paradox management practices spill over between organizations along a global value chain. Based on case study evidence related to a global value chain from the footwear industry between Germany and China, we study how different actors (i.e. retailer, importer, manufacturers, material suppliers) coped with the paradoxical tensions between providing living wages to workers and upholding high financial performance. Our findings show: (a) the German national business system created an institutional context in which the living wage paradox was evaluated in a proactive manner, while the Chinese national business system favored a more defensive response to the paradox and (b) that Chinese organizations reframed a proposed paradox management practice (“living wage audits”) in a way that it lost its intended meaning. Based on these results, we develop a sensemaking model, which explains why the paradox management practice was reframed from a proactive into a defensive tool.
This study discusses how and whether paradox management practices spill over between organizations along a global value chain. Based on case study evidence related to a global value chain from the footwear industry between Germany and China, we study how different actors (i.e. retailer, importer, manufacturers, material suppliers) coped with the paradoxical tensions between providing living wages to workers and upholding high financial performance. Our findings show: (a) the German national business system created an institutional context in which the living wage paradox was evaluated in a proactive manner, while the Chinese national business system favored a more defensive response to the paradox and (b) that Chinese organizations reframed a proposed paradox management practice (“living wage audits”) in a way that it lost its intended meaning. Based on these results, we develop a sensemaking model, which explains why the paradox management practice was reframed from a proactive into a defensive tool.