Why perceived fairness is so important to global supply chains

Supply chains are global social systems connecting millions of businesses, people, cultures, resources and communities. Each transaction, contract and interaction in these networks is fundamentally tied to one essential principle: fairness. Fair transactions deepen trust and collaboration among supply chain parties. However, even the most efficient networks might collapse if partners feel exchanges are unfair.

Fairness, therefore, is rarely a shared ideal across multi-tier supply chains. For example, a large retailer may view its procurement terms as balanced, while small producers may see them as exploitative.

Such tensions surfaced during the United Kingdom's egg shortage in 2022–2023, where some retailers raised consumer prices yet passed on only modest increases to farmers, who struggled with soaring feed and energy costs. What one side called market stability, the other experienced as inequity. Thus, fairness disputes in global supply chains are not merely ethical dilemmas but structural outcomes of how supply networks are designed and governed.

Fairness perception gaps may emerge due to a combination of factors: who holds power, how distant supply chain actors are from one another and how complex the network is. A vertically integrated food supply chain differs from a dispersed electronics supply network, just as producing perishable goods carries different fairness risks than raw-material mining or logistics.

Global supply chains operate as loosely coupled systems, where firms are linked by contracts, information flows and shared goals, yet retain autonomy to act on local priorities. This flexible design enables adaptation to shocks and market shifts, but it also creates room for misunderstanding, selective accountability and diverging ideas of what is fair.

In tightly coupled systems, such as just-in-time automotive production, any disruption in one node quickly affects all others. Loose coupling, by contrast, allows subsystems to move at their own pace.

Loose coupling is common in global food or commodity chains, where suppliers, brokers, processors and retailers interact intermittently, often separated by distance, culture and regulatory differences. Loose coupling offers resilience, but it also institutionalizes distance, allowing moral responsibility to dissipate across tiers. Hence, the same structural looseness that sustains flexibility can also fragment perceptions of fairness.

For example, under the EU’s Unfair Trading Practices Directive, many retailers view contractual clauses as fair and compliant with policy. Yet small producers outside highly regulated markets often perceive those same clauses as exploitative because they lack similar institutional safeguards.

Loose Coupling Theory helps explain these contradictions by showing that networks with partial interdependence generate variable communication, inconsistent expectations and asymmetrical access to information. Some links are direct and frequent; others are indirect and episodic. As messages and resources move unevenly through these connections, fairness becomes a matter of perspective rather than a rule. Transparency gaps, differences in local discretion and cultural distance all reinforce this effect. Consequently, power magnifies these effects, as actors with greater control over information or standards define fairness on their own terms, leaving weaker partners to absorb the consequences.

In loosely coupled supply chains, distributive fairness suffers when information about costs and rewards is opaque, procedural fairness weakens when decision rules vary across tiers, and interactional fairness erodes when communication is infrequent or filtered through intermediaries. Together, these conditions produce fairness asymmetry, where each tier constructs its own sense of fairness based on limited visibility.

Ultimately, loose coupling explains not just miscommunication, but the political economy of fairness, the way distance and discretion enable inequitable yet legitimate arrangements.

Firms experience fairness differently not only because of power imbalances or distance but because structural conditions interact with local routines, individual discretion and turbulent contexts. In loosely coupled systems, autonomy allows actors to interpret the same rules and outcomes through distinct lenses, which explains why identical contract terms or governance processes can appear fair to one partner yet exploitative to another.

Translating these insights into practice requires mechanisms that narrow fairness perception gaps without undermining autonomy. Each intervention should strengthen a different dimension of coupling, i.e., normative, cognitive, relational, or adaptive. Thus, enabling us to turn fairness from an abstract value into an operational system.

The first step is institutionalizing shared standards that make fairness measurable and comparable across boundaries. Codified fairness principles, transparent auditing and equal-opportunity procedures give firms a common reference point and prevent interpretive drift. When fairness is built into codes of conduct and supplier policies rather than left to personal judgement, relationships become less vulnerable to misunderstanding.

Another layer involves education and awareness. Fairness must be learned, communicated and reinforced at every level. Training procurement teams, suppliers and intermediaries to recognise and address inequities creates a shared vocabulary and anchors fairness as part of daily practice. Education functions as a relational equaliser, helping firms with different levels of power and information to engage on more balanced terms.

Leadership is also central. Within companies, visible commitment from senior executives signals that fairness is a strategic priority rather than a compliance task. Externally, regulators and policymakers play a stewardship role, correcting structural imbalances that individual firms cannot solve alone.

When NGOs, farmer associations and professional bodies act together through coalition-building, they serve as fairness brokers. They amplify weaker voices, mediate disputes and promote industry-wide alignment. Such coalitions strengthen relational coupling by creating shared accountability across otherwise disconnected tiers. However, fairness mechanisms themselves risk co-optation if designed solely by dominant firms; without inclusive participation, they may reproduce the very asymmetries they seek to correct.

Finally, contracts and communication must evolve from static documents into living frameworks. Transparent terms and responsive dialogue help partners revisit agreements as conditions change. Openness and joint monitoring ensure that fairness is not locked in outdated clauses but continuously negotiated in light of new realities. This adaptive approach tightens the right links, particularly those built on trust and shared understanding, while keeping enough flexibility for innovation to thrive.

As global networks expand and crises grow more complex, the ability to manage fairness will define which firms remain trusted partners in tomorrow’s economy. The next era of supply chain leadership will not be defined by efficiency alone but by how well companies embed fairness into the core of their systems, balancing autonomy with alignment, power with partnership, and profit with purpose. Those that build fairness into the foundation of trade will define what responsible globalization looks like in the years ahead.