Three weeks ago the Rana Plaza factory building in Bangladesh collapsed, killing 1,127 people. A majority of these were workers producing garments for sale in the United States and Europe. The factory manufactured apparel for brands including Benetton and Walmart among others. An investigation revealed that the building was deemed unsafe just days before the collapse, but factory supervisors ordered their employees to continue working in these hazardous conditions.
The obvious question is why a tragedy like this would occur, even after there had been a forewarning. The answer is because factories like Rana Plaza and others in Bangladesh are under immense pressure to produce a high volume of low-cost garments for their biggest buyers, Walmart, H&M, Inditex (which owns Zara), and Gap to name a few. These companies pride themselves on their ability to get apparel into stores only weeks after designing them. However, this incredible efficiency requires a tremendous amount of manual labor, and no where are labor costs cheaper than in Bangladesh. The massive global supply chains of a majority of apparel manufacturers flow through the South Asian country which trails only China in terms of garments exported. Unfortunately, most of the large Western companies are unaware of the conditions that exist in the factories where their products are being produced.
The latest tragedy has finally caught the attention of European and American companies. This past week H&M, the largest buyer of garments from Bangladeshi factories, agreed to a plan to improve fire and building safety in Bangladesh’s apparel factories. The five-year plan calls for independent safety inspections and for companies to make the findings public. Joining H&M were Inditex, the world’s biggest clothing retailer, and several other European apparel companies. However, PVH, the owner of brands such as Tommy Hilfiger and Calvin Klein, is the only American company that has signed the pact. Companies including Gap, Walmart and JC Penney have considered the plan, but have not yet signed on, mostly due to the cost and how legal issues would be resolved.
I believe this safety pact is a step in the right direction on the road to abolishing subpar working conditions around the world. Therefore, from a management perspective, I think that companies that are not signing the pact, like Walmart and JC Penney, are making a mistake. Not signing sends a negative message to consumers and investors, if the companies are unwilling to spend money to protect human lives customers will question the ethics of the company’s management. Ethics is an important facet of operations management. The managers at American apparel companies need to recognize these issues, like their European counterparts have, and address the dangerous working conditions that exist in their supply chain. I think in the long run the benefits of ensuring safe conditions for all in the supply chain will outweigh the cost.
What is your opinion on the decision of many American companies to not sign the safety pact?
Do you think it is the duty of American companies to ensure the safety of workers in foreign countries?
Sources
http://www.businessweek.com/articles/2013-05-13/h-and-m-pledges-to-make-bangladeshi-factories-safer
http://www.ft.com/cms/s/0/79cedd4e-c000-11e2-b19c-00144feab7de.html#axzz2TmPslBBP
http://money.cnn.com/2013/05/13/news/companies/hm-bangladesh-safety/index.html
http://www.nytimes.com/2013/04/25/world/asia/bangladesh-building-collapse.html?pagewanted=1&_r=0&hp
I strongly believe that companies who outsource their labor should also take responsibility for the people who make their clothing. The people who accept these jobs already receive a minimal amount of compensation, why should they also be denied safety? Overall, people do want cheap and “high” quality clothing, but I would like to believe that the same people would not want the workers safety to be at risk. Governments, whether the U.S. or from various countries, could also step in and offer incentives for companies to improve the work place quality abroad. Tax incentives have always been a powerful tool for the American government to get company compliance or at least reduce resistance. People would be willing to pay a couple extra dollars for clothing if it would ensure the safety of workers, and not solely fatten up the earnings of companies.
I’m so appalled at this tragedy. Just thinking about the fact that some of the clothes that I buy could be at the cost of a person’s life, is shocking. Yes of course, every company should ensure the safety of its workers. Its basic ethics. I also, think some of the responsibility should fall upon the inspectors or the managers who are in charge of the factories, who approve of these conditions. Even after the factory was considered unsafe, work still continued. Either the inspectors need to check back upon the unsafe factories and make sure no work is done or the managers needs to stop work, until the companies provide safe working conditions. Hopefully, this event causes more and more companies to step in and make sure their employees have good working conditions. If not, then consumers will eventually find out about tragedies like these and lash out against the companies. This might cause an end to shopping at that specific company and outraged consumers. This could affect the company drastically.
I completely agree with your opinion that the companies who have not signed the pact are making a mistake. It is an atrocity that it even happened in the first place, and when there is a chance to prevent such tragedies in the future, these companies need to take action to rectify their mistakes.
I do believe that it is the duty of American companies to ensure the safety of workers in foreign countries because they are still working for the American company, if not directly. Just as a chef must be wary of where his produce comes from to ensure the safety of those who eat from him, these companies must be sure of the conditions in which their garments are being made.
I think from a company’s perspective it could be a double edged sword. Like you stated these companies pride themselves on their ability to quickly get products into stores and keep up with, or even drive, the increasingly rapid changes in fashion. Which could create a problem; if the American companies sign onto this pact will that effect their output and therefore their earnings? And would they rather be subject to that or be responsible for hazardous, even deathly working conditions?
I personally think they do have a responsibility to sign and enforce this pact because they can drive the change in global working conditions. They cannot and should not turn a blind eye to this situation because it will effect their revenue.