Workers in labour-intensive industries in developing countries have been described as the ‘hidden hands’ in the making of valuable goods in global production networks (GPNs). The process of improving the rights and entitlements of workers in GPNs have been referred to as ’social upgrading’. However, literature on social upgrading has tended to overlook the role of small and medium-sized enterprises (SMEs), and there is still little scientific understanding of how small businesses in developing countries can engage in social upgrading. The aim of this thesis is to enhance the understanding of how SMEs in developing countries can improve working conditions and labour rights. Through a qualitative case study, this study goes beyond statements of leading Fair Trade brands to provide insights based on voices of both workers and owner-managers in a small garment factory in Nepal. This study brings forward observations where SMEs, shaped by their characteristics, are enabled to evade responsibilities concerning working conditions and labour rights.

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