Organizational unethical behavior – A case study on Rana Plaza PDF

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A case study on unethical practices in garment factories in 3rd world countries...

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Organizations’ unethical behavior – A case study on Rana Plaza Introduction Primark is an Irish fashion and clothing retailer headquartered in Dublin and an auxiliary of ABF. The organization's first store was established by “Arthur Ryan for the Weston family in June 1969 on 47 Mary Street, Dublin”, the store stays usable right up 'til the present time. Primark offers a different scope of items, including infant and kids' attire, ladies' wear, men's wear, home products, footwear, and everyday cosmetics and makeup products. Alongside fashion design brands, for example, the Zara and H&M, Primark adds to the modern fashion and design field. As indicated by an article about Primark in The Economist, “For many shoppers, Primark has an irresistible offer: amazing trendy clothes at amazingly low prices. The result is a new and even faster kind of fast fashion, which forces consumers to buy heaps of items sometimes even the same ones to use when the first ones worn out, discard them after a few wears and then come back for another batch of new outfits.” Owing to its immense popularity and well-established brand name, Primark has now expanded globally to different nations all over the world. The offered products by the company are sold at lower rates than their competitors, making them market leaders in the fashion industry. However, owing to its increased sales, the company is known to mass produce its products through outsourcing to garment factories in 3rd world and poor countries. The labor is outsourced to certain countries like Bangladesh, Taiwan and others so the labor is also cheap, although Primark claims that in recent years it has been committed to providing ethical measures when outsourcing labor. The clothes are made in Asian countries where the workers are paid very small wages and work under poor conditions (by Western standards) and expect relatively small profits in order to gain bigger sales. The element of outsourcing is detrimental to the host country which suffers at the cost of the rich nations.

Issues highlighted Outsourcing is especially effective for the textile industries and garment factories in 3rd world nations like Bangladesh, India and Pakistan etc. where production costs are often limited to cheap machinery and uneducated workforce. Bangladesh is a developing nation with huge garments manufacturing capacities. With pro-textile Government, experience, improved safety, and compliance measures, gas, human resources, and skill level. Bangladesh is a preferred destination for RMG. Every brand from low to high end is importing Readymade garments from Bangladesh. There was a time when Bangladesh textile industry was dependent on foreign technical assistance but now Bangladesh is a self-sustaining technical ability. Local technicians are well experienced and technically qualified young generation is making things much more comfortable. Bangladesh garments industry is maintaining its growth with more than 8.5 %. According to the Economist “The apparel industry, employer of 40 million workers, mostly rural women, contributed 83.49% to Bangladesh’s total exports of $36.66 billion to date.” “According to the World Trade Statistical Review 2017, Bangladesh’s global market share in clothing was 6.4% in 2016. EPB data shows Bangladesh's export earnings from the RMG sector stood at $30.61billion, posting 8.76% growth in the last fiscal year.” Bangladesh textile industry is on the right path of glory with the addition of in-house spinning, printing and denim facilities Bangladesh is capable of serving the full basket of garments. But the real question is to consider the underlying cost behind such economic progress. The industries and sweatshops working in Bangladesh can fill makeshift workplaces with hundreds of underpaid workers, working around the clock with no regard to things such as basic human rights, and are able to reduce costs to a pittance. The companies like Primark operating in these nations are known to combine these low production costs with optimized

distribution webs and high sales volume and get a healthy revenue, coupled with a nice profitability. Power and interests of Stakeholders While technically these global apparel firms like Primark control whether or not their suppliers work with illegal practices such as these, they do not have control mechanisms to see whether their suppliers use another manufacturer (one does not follow these regulations) to supply them. Conditions inside sweatshops would horrify the Western consumers of their products. And it’s not just the conditions, it’s the workers: they are often young children who are shamelessly exploited. The workers continue to work in appalling and often dangerous working conditions regardless of their ages which leads to destruction of childhood for the youngest workers. “In 2013, 1130 workers were killed, 2500 injured. in the collapse of the Rana Plaza textile factory in Bangladesh” which was one of the mass producers for Primark. This disaster was linked to the “1911 Triangle Work Fire in New York City where 146 young women jumped to their deaths in the worst industrial accident in U.S. history.” The Rana Plaza incident galvanized Bangladeshi authorities and Primark management to push through reforms in workplace safety and conditions as the Triangle fire did in the U.S but to no avail. The workers in 3rd world nations continue to be exploited at the name of outsourcing. The workers face a lot of socio-economic cons. The health of the workers is often poor, the wages are low, and it's almost prison like in the case that they have barb wire around the facility, but they continue to work there as they have no other choice but to earn something. Their extreme levels of poverty dictate their behavior as they continue to work in sweat shops for as low as 10$ a day. The cause of this massive decline in the world poverty rate is one simple thing: industrialization coupled with international trade, which is an agenda of Primark.

Different economists declare such factors as outcomes of immense globalization. They assert that this is what happens when those evil multinational corporations go into poor countries, build factories, and pay people $10 per day to work there. Outsourcing technique by Primark is great in the way that it's cheap labor but it takes advantage of individuals and works in certain cultures but would never thrive in Canada, USA, UK, etc. Like it does in China. Ultimately, it's a monopsony problem where the firm is taking advantage of workers in an extreme manner. Workers have little to no benefits and are easily replaced as there is a line-up for these types of jobs in the cultures that they thrive. To sum up, these low prices of products offered by Primark are attained by a combination of low-cost manufacturing, optimized supply chain and high volumes, and this whole system is greased by blood and tears of workers. How Stakeholder Alliance can be created The multinational organization are the true driving force which has led to the current state of globalization. This obviously is supported by technical advancement in the field of transportation and telecommunication. MNCs are contributing to making our markets varied, competitive and efficient. As consumers, we have a wider range of choices at competitive prices. Apart from a wide range of goods, MNCs bring in employment, development of human resources, and with that, prosperity. We view MNCs as completely foreign entities (and the consequent distrust arises from our recent history), however, today many Indians are managers, heads, CEOs and of course, shareholders of many MNCs. We are very much a part of the term "multi-national". If nothing else, MNCs can and should bring us a vision of developing our own firms to that level. I strongly feel that no matter how much real, and positive changes in our lives are due to MNCs, they should be accountable for their impact on communities and environment.

References https://www.nytimes.com/2018/04/24/style/survivors-of-rana-plaza-disaster.html...