The Social Dilemma of Human Behavior & Sustainable Choices in the Fashion Supply Chain

Introduction

Although the premise of clothing characterizes a rudimentary need (Yawson, Armah, & Pappoe, 2009), the intricacies and system dynamics specific to the fashion industry’s supply chain are far from basic (Amed, Berg, Brantberg, & Hedrich, 2016). The current state of the fashion industry is challenging because factors contributing to its complexities are uncertain and constantly changing (Amed, Berg, Brantberg, & Hedrich, 2016). From the acquisition of raw materials, to manufacturing and distribution for purchase by the consumer, the fashion industry can influence sustainable practices across the global supply chain (Strahle & Muller, 2017).

Sustainability involves changing environmental dynamics that affect dimensions of ecology, economy, socio-politics, and human behavior (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). Research shows an inherent dissension among some fashion consumers (McNeill & Moore, 2015), who “often share a concern for environmental issues even as they indulge in consumer patterns antithetical to ecological best practices” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). An emerging concept in industry is fast fashion, which refers to “low-cost clothing collections that mimic current luxury fashion trends and helps sate deeply held desires among young consumers in the industrialized world for luxury fashion, even as it embodies unsustainability” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012).

Globalization and competition create increased financial and operational pressures in industry to reduce costs (Christopher, Lowson, & Peck, 2004). When paired with growth in human population (Strahle & Muller, 2017), scarcity of natural resources (De Vries, 2013), growth in industry (Amed, Berg, Brantberg, & Hedrich, 2016), advances in technology, consumer trends (Education Bureau, 2017), and human behavior in social dilemmas, the participants in a fashion supply chain may partake in unsustainable business practices (Chan & Wong, 2012). At the intersection of globalization, market competition, fast fashion (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) and sustainability is the social dilemma of fashionable versus durable clothing. This analysis will explore the social dilemma of human behavior and sustainable choices in the fashion supply chain using the context of a pay-off matrix (De Vries, 2013).

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Social Dilemma Assessment

A social dilemma is where interdependent participants face a conflict between the maximizing personal gain and/or a collective interest (Dawes, 1980). As noted by Dr. Robyn Dawes (1980), leading psychologist and researcher, “public goods dilemmas occur when individuals can choose whether to contribute to a common pool that benefits both contributors and non-contributors alike, as long as enough choose to contribute”. Resource dilemmas are slightly different because individuals can decide how much to withdraw for personal use from a common pool that will only be maintained if withdrawals are kept to a minimum (Dawes, 1980). Public goods and resource dilemmas encompass “many of the most critical problems facing humanity, most notably those regarding resource shortages caused by overuse and failures to contribute to the common good” (Shankar & Pavitt, 2002). Moreover, research demonstrates that communication between participants has a significant effect on cooperation rates in these two types of social dilemmas (Shankar & Pavitt, 2002).

Overview of the Pay-Off Matrix

The pay-off matrix offers a way to analyze human behavior in situations of interdependence and conflict (Yawson, Armah, & Pappoe, 2009). As depicted in Figure 1, interdependent positions can range from virtuously cooperative, wherein a gain for one is a gain for the others, to a win-lose competitive position (Dawes, 1980). A decision to maximize individual gain is known as a defecting choice (Dawes, 1980), depicted as “you are the free rider” in Figure 1 (De Vries, 2013). Conversely, a win-win decision (De Vries, 2013) to maximize the gain of the collective is known as a cooperative choice (Dawes, 1980). Furthermore, “at any given decision point individuals receive higher payoffs for making selfish choices than they do making cooperative choices regardless of the choices made by those with whom they interact” (Weber, Kopelman, & Messick, 2004). The cost of the dilemma is that everyone involved receives a lower payoff by making a selfish choice (Dawes, 1980).

 

Figure 1: Pay-Off Matrix in a Social Dilemma (De Vries, 2013)

Pay-Off Matrix Participants in a Fashion Supply Chain

While enduring substantial growth over the past two decades (Strahle & Muller, 2017), the fashion industry has drastically evolved due to retail consolidation, globalization and e-commerce (Amed, Berg, Brantberg, & Hedrich, 2016). It is considered to be one of the most polluting industries in the world (Strahle & Muller, 2017). Industry and trading partners often request for participants to act sustainably (Strahle & Muller, 2017). Participants in a fashion supply chain include suppliers, manufacturers, distributors, retailers, and consumers (Strahle & Muller, 2017).

Theory and Influence in Consumer Fashion Decisions

Martin Christopher, thought leader in supply chain theory and best practice, defines fashion markets as typically exhibiting the following characteristics: short life cycles, high volatility, low predictability and high impulse purchasing (Christopher, Lowson, & Peck, 2004). A key concept in understanding the impulses of consumer purchasing is Maslow’s theory of human motivation (Chan & Wong, 2012). The theory classifies all human efforts as an attempt to fulfill one of five needs (Yawson, Armah, & Pappoe, 2009, p. 951). Figure 2 shows the hierarchical order in which these needs are connected, specifically in decisions that involve buying clothes.

Figure 2: Adaption of Maslow’s Motivational Theory in Fashion-Based Decisions (Yawson, Armah, & Pappoe, 2009, pp. 952-953)

Consumer decisions to purchase fashionable or durable clothing are also influenced by body type, age, family, lifestyle, peers, society, and consumer socialization (Yang, Song, & Song, 2017), or amount of disposable income that allows for considerations of quality and durability (Education Bureau, 2017). Other influences include values from one’s culture, environment, and value orientation (Education Bureau, 2017, p. 16). Lastly, frequency of wear and care instruction (McNeill & Moore, 2015) may influence the need for fashionable, inexpensive, and of lesser quality clothing versus durable clothing (Education Bureau, 2017, pp. 47-51).

Perspectives in the Pay-Off Matrix

Using the interdependent participants in a fashion supply chain, the over-arching perspectives and the decision to cooperate or defect in sustainable practices are shown below in Figure 3.

Figure 3: Pay-Off Matrix in a Fashion Supply Chain (De Vries, 2013)

Cooperate, Cooperate: A Win-Win Solution

When all participants cooperate, all are aligned in sustainable practices (Yang, Song, & Song, 2017). Because all parties benefit from this scenario, resolutions to the conflict are likely to be accepted voluntarily (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). In this scenario, the supplier uses ethical growing conditions, labor practices, and pricing mechanisms that are passed onto the manufacturer (McNeill & Moore, 2015). The product is manufactured with considerations in sustainable design, efficient use of water and energy in textile process, chemical-free treatments, and lean waste reduction (Shankar & Pavitt, 2002). Distributors and retailers respect considerations of packaging waste, energy use in transportation and logistics (Christopher, Lowson, & Peck, 2004) and the ethical treatment of trading partners. Most importantly, the consumer uses sustainable participation across the supply chain to guide purchasing decisions. After purchase, the consumer limits the use of chemical detergents, water and energy use in care, early disposal and landfill waste, and shares the experience with others in his or her circle of influence (Yang, Song, & Song, 2017). The costs of quality and sustainable considerations are shared and accepted by each participant (Jung & Jin, 2014).

Cooperate, Defect

In this scenario, the consumer adheres to sustainable practices while the supplier, manufacturer, distributor, and retailer defect. The consumer receives a small positive individual outcome that is immediate and a large negative collective outcome (the depletion of future resources) is delayed (Shankar & Pavitt, 2002). The defectors receive a higher payoff in the short run no matter what decisions all other individuals make (Dawes, 1980). The result is that the consumers suffers or loses (Dawes, 1980). The defecting choice is known as the “dominant strategy” (Dawes, 1980). Because the dominant strategy produces less preferred outcomes, it is known to be a deficient outcome (Dawes, 1980). The costs of sustainable considerations are born by the consumer and common resource pools (Jung & Jin, 2014).

Defect, Cooperate

In this scenario, the consumer defects and is “a free-rider” (De Vries, 2013), while the supplier, manufacturer, distributor, and retailer adhere to sustainable practices. The consumer pursues individual short-term interest regardless of the impact to common resource pools in the long run (Chan & Wong, 2012). Common pool resources are available to all participants such as air, water, energy, and are increasingly in short supply (Shankar & Pavitt, 2002). When the consumer defects, resources are still available without any personal cost borne. The collective actively participates in aforesaid sustainable practices across the supply chain.

Defect, Defect: The Commons Tragedy

In this scenario called the commons tragedy (De Vries, 2013), all participants in the supply chain defect causing unsustainable outcomes in decision making as depicted in Figure 4. The concept echoes that “open-access common resource pools are exploited until the very last unit as long as someone else pays for it” (De Vries, 2013, p. 390). In a widely cited paper entitled The Tragedy of Commons (1968), the biologist Hardin suggested there is an inherent tendency amongst humans to overexploit such a shared, common, or collective resource” (De Vries, 2013, p. 390). Research related to the commons tragedy “emphasizes the role of factors that may predispose people to take risks in social dilemmas” including aforementioned theory and influence in consumer fashion decisions (Weber, Kopelman, & Messick, 2004). As Figure 4 suggests, participants may differ systematically in the way each arrives at the same decision to defect.

 

Figure 4: Unsustainable Outcomes of Decisions Made by Participants in the Fashion Supply Chain (Strahle & Muller, 2017)

Conclusion

Sustainability and ethical conduct has gained increasing importance in the fashion industry (Joy, Sherry, Venkatesh, Wang, & Chan, 2012). Many fashion companies are focusing on tactical efficiencies, implementing changes to their core operations “from shortening the length of the fashion cycle to integrating sustainable inno­vation into their core product design and manu­facturing processes (Amed, Berg, Brantberg, & Hedrich, 2016). However, although companies realize that trendy, affordable fashion raises sustainable concerns, the pressure to meet consumers demands is still influencing industry behavior (Amed, Berg, Brantberg, & Hedrich, 2016).  As demonstrated in this analysis, sustainable decisions in the textile and fashion industry can be controlled along the supply chain (Strahle & Muller, 2017). Specifically, “retailers are the link between the supplier and the consumers. They could be the ecological gatekeepers and help the relevant partners along the supply chains incorporate sustainability into the business” (Yang, Song, & Song, 2017). While the fashion supply chain and consumers continue to evolve in the progression of whether to make and/or consume fashionable or green products, the challenge to connect and meet “deeper elements of value, such as high ethical standards in sourcing, efficient use of materials, low-impact manufacturing, assembly, and distribution,” (Joy, Sherry, Venkatesh, Wang, & Chan, 2012) will remain challenging for decades to come.

References

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Strahle, J., & Muller, V. (2017, October 30). Key Aspects of Sustainability in Fashion Retail. Retrieved from Springer Link: https://link.springer.com/chapter/10.1007/978-981-10-2440-5_2

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