Ways To Improve Business Practices To Prevent Tragedies In Bangladesh’s Garment Industry

Executive Summary

On April 24 2013, 1134 people were killed and 2,500 were injured when the Rana Plaza building in Savar, Bangladesh collapsed on top of garment workers inside its factories. It would be known as the worst accident in the garment industry anywhere.

This happened only five months after a horrific fire at a similar facility prompted leading multinational brands to pledge to work to improve safety in the country’s booming but poorly regulated garment industry.

Labour groups, Western clothing companies, the Bangladeshi government and others have made some progress toward preventing similar tragedies, but more still needs to be done.

There was never any doubt that improving working conditions in Bangladesh, one of the world’s poorest countries, would be incredibly difficult. The collapse of Rana Plaza was just one, though by far the worst in a series of industrial accidents in Bangladesh’s garment industry, which has become one of the biggest exporters of clothes to the United States and Europe because of its low wages.

It was later discovered that 28 brands that sourced clothes from the plaza included Primark, Bennetton, Mango, Matalan and Bonmache, prompting public concern
 
about the working conditions of garment factories around the world which contribute to western high street fashion stores.

Ethical consumerism encourages people to think about how the products they buy are sourced and produced which are not harmful to the environment and society. This can be evidenced through simply purchasing eggs that are free-range or boycotting goods/companies which promote child labour or unsavoury working conditions.

Ethical consumerism is a growing market. A recent report from the Co-operative Bank showed a third of UK consumers claiming to be concerned about ethical consumption, with a large number of the public willing to challenge and boycott companies which do not comply with ethical standards.

You are required to write an analytical business report that covers the following tasks:

Task

• Discuss the ways in which companies, like the ones mentioned in the extract above, that sourced clothes from the Rana Plaza can help improve business practices to prevent recurrence of events of this nature.

• Choose any company, research and evidence how they operate ethically, taking into account their approach to consumerism, values and environmental friendliness.

This report involved a critical analysis of the ways in which the purchaser from westernised countries could avoid the situations similar to that of Rana Plaza from occurring in future and also the approach of Tesco towards ethical consumerism. The conduct of analysis has indicated different important ways in which the purchaser could avoid such occurrence of building collapse from taking place further. These initiatives are mainly in terms of providing higher pay, sourcing materials from suppliers that comply with the terms on providing best working environment to their employees, and many more. The analysis of ethical approach of Tesco Plc indicated that the company is highly ethical and adapts a range of ethical practices as a part of its daily performance of business practices.

This is a case study analysis based on the case of Rana Plaza as provided. An analysis of the case indicates the event at Rana Plaza that has killed 1134 people and 2500 were injured. The case questions the role of companies that sources their requirements from this plaza, and their roles and responsibility towards such incidents. Businesses across the world are concerned with making their own profit and they are not concerned with the labour or workers that are actually involved in the manufacturing of such products and services. As a result, the case questions the concept of ethical consumerism in particular which indicates that the consumers of product should be aware of the processes that are being carried out by the companies in sourcing or producing such products. Overall, the case deals in the ethical values in the purchasing process, and raises significant such questions regarding the product sourcing by these companies.

Ways of Improving Business Practices in Preventing Recurrence of Such Events

This report therefore analyses the ways in which the western companies that sourced their requirements from such Rana Plaza can achieve improvement in respect to their business practices in avoiding such collapses. In addition to this, the analysis also focuses on selecting a company with a view to analyse the ways in which they operate in an ethical way by taking into consideration their approach to consumerism, values and environmental friendliness.

The case analysis of Rana Plaza in particular has indicated that there are westernised companies that have primarily become the customers of the garment industry that was operating in it. The collapse of Rana Plaza has killed many people and also raised questions on many such firms that are sourcing their requirements for garments from this Rana Plaza. Although such incident in the form of collapse of such Rana Plaza has taken place, yet there can be several such measures that could be employed in order to ensure that similar kinds of incidents can be prohibited from occurrence in the future. These important initiatives are discussed as follows:

• An analysis of the case of Rana Plaza indicated that before the incident actually taken place, it was identified that there were certain cracks that have been discovered in the building. However, despite identifying such cracks, no major initiatives have been considered and the resulting impact is therefore the final collapse of the building. In this kind of circumstances, the companies that have sourced their requirements from Rana Plaza should have avoided purchasing their requirements for garments by claiming that their premises need  to be changed or they need to be repaired before allowing the employees to work on. This could be an important strategy that could have prevented the occurrence of such incidents as evident in respect to Rana Plaza In Bangladesh (Rana Plaza Victims Still Await Compensation, 2013).
• Apart from the above major initiative, the case analysis of Rana Plaza has indicated that majority of the companies that sourced garments from Rana Plaza are the westernised companies based in UK and US. The main concern of these companies as identified from the case analysis is that they are focused towards purchasing their requirements at cheaper cost. Availing garments at lower cost has been the prime motive factor behind their sourcing of garments from Bangladesh. This has been possible to them because of the cheap availability of labour. Their lower payment for the purchases has been a major factor which forces this labour to work under such adverse situations whereby they have identified that the working conditions are not favourable to them. Such policy of lower payment for the purchases is therefore a major factor that can be regarded as a potential factor contributed towards the collapse of Rana Plaza. The situation can therefore by avoided by raising the standards through increased payment to the labour so that they have better opportunities of working across efficient working conditions (Bangladesh: Rana Plaza Victims Urgently Need Assistance, 2014).
• Another major factor that could have restricted the occurrence of such collapses of building is by way of developing the overall infrastructure across the country. In this respect, the role and contribution of such westernised companies is significantly higher as they could potentially contribute towards the overall improvement in the infrastructure of the country. This is mainly because they could make larger payments for the purchases of garments as made by them, and this could contribute largely towards taxation liability. As a result, the earning could have been utilised by the government in the development of infrastructure across the economy, and the resulting impact is therefore efficient overall working processes being carried out by Bangladeshi people.
• The companies making purchase from the operators in building such as Rana Plaza could also avoid making use of the garment products as produced by these manufacturers that exploits local people. These westernised companies could include purchasing terms and agreements which must be complied by the local manufacturers. These terms could be in the form of providing safe working environment to their employees, or making it essential that the employees are paid reasonably higher for the contribution of efforts as made by them. This would require the local manufacturers in Bangladesh to make use of efficient policies aimed at meeting out the expectations of these westernised companies positively and thereby in satisfying their terms (Gomes, 2013).

These above indicated policies and procedures are certain important ways through which the prevention of the occurrence of such events can be ensured. However, it is not only these companies that could account for the restriction of such practices or exposure of employees to threats, rather there is a requirement for collaborative efforts from large number of people and authorities. As for instance, the role of government of the economy is significantly important because government can devise strategies and initiatives that could ensure the development of infrastructure and also provides the local people with sufficient level of opportunities. There can be the formulation of policies and procedures by the government which could restrict the usage of child labour from the process, and there could also be the restriction with respect to the over exploitation of workers across the country. Apart from this, the employers are also required to make arrangement of proper working environment condition for their employees so that the threats of collapses of buildings could be restricted from occurrence.

The analysis in this section is now focused towards performing a critical assessment of a company that claims to operate in an ethical way. The company as selected for the purpose of analysis is Tesco Plc which has been a UK based Retail Company. Tesco is operating at a larger level and it accounts for covering majority of the retail markets in UK and also has its operations across majority parts of the world. This section of analysis is now focused towards evaluating the ways in which Tesco operates ethically and also analyses the approach of the company towards consumerism, values and environmental friendliness.

Ethical Operations by Tesco Plc: An analysis of Tesco Plc indicates that the company claims to operate in a highly ethical way. The ways in which the policies and procedures are carried out at Tesco Plc are identified as highly ethical. As for example, Tesco makes it sure that ethical values are observed in respect to all the major areas of its operations whether it includes the sourcing of raw material or the management of wastes in its processes and activities. The ethical values are also evident in respect to the employee management process that has been carried out across the company, and with respect to the environmental performance, there has been specific level of emphasis being placed at Tesco to achieve environment compliance processes and procedures (Harrison, Newholm and Shaw, 2005).

Selection of a Company that Operates Ethically

Approach to Consumerism, Values and Environmental Friendliness: The approach of Tesco Plc towards consumerism, values and environmental friendliness can be better assessed by way of examining the policies and practices that are being carried out across the company. An analysis of practices at Tesco Plc indicates that the company focuses on the welfare of society at large, and this is evident from the positive waste management practices as adopted by the company. As Tesco is operating on such a larger basis, it results into the generation of wastes across the company on huge level. This has been addressed at Tesco through its FairShare initiative through which the surplus production of foods are provided to the community people that need meals (Tesco Foodwaste, 2014). In addition to this, Tesco has strict sourcing policies whereby its suppliers are required to meet out all its requirements in order to become its suppliers. As for example, Tesco has policy aimed at protecting the domestic suppliers and this shows that the company is extremely concerned with operating in ethical way. Tesco does not allow the activities such as performance of animal testing, as they are completely prohibited from performance. It is not only these moral obligations that are being fulfilled at Tesco, but the company also accounts for fulfilling the legal aspects in performing the management of its business (Tesco Animal Welfare, 2014). The important codes of conduct that are being complies by Tesco Plc includes the UK Bribery Act 2010, UN Global Compact Principle 10 (Trading Responsible, 2014). The environmental initiatives that are being considered by Tesco Plc includes operating zero carbon stores by the company, conserving water resources and looking towards making minimal use of water resources etc (Guido, 2009).

The above analysis indicated that there has been positive level of approach to Tesco Plc towards the concept of consumerism, values and environmental friendliness.

Conclusion

A critical analysis of the case of Rana Plaza has been performed and it is evaluated that the role of purchasers from the westernised countries could play an important role in restricting the occurrence of such cases as evident in respect to Rana Plaza. They are required to make it sure that they purchases from the suppliers that pay adequate attention in providing good working conditions. They can also increase the pay to employees who work under such factory, and many such initiatives have been identified. Apart from this, a case company Tesco Plc has been selected in order to analyse its approach towards ethical consumerism and it is evaluated that Tesco has good approach towards ethical consumerism. There are a large range of initiatives that are considered by the company such as ethical trading, responsible sourcing of raw materials, water resource conservation and many more.

There are certain recommendations that are considered essential and these are indicated as follows:

• Companies should focus more on trading in an ethical manner in their operations. They should emphasise the concept of consumerism (Harrison, Newholm and Shaw, 2005).
• The responsible sourcing of materials is essential for an organisation to succeed (Tesco Resources, 2014)
• There should be adequate importance that should be placed on the environmental performance by the company (Harrison, Newholm and Shaw, 2005).
• Paying adequately to the employees is essential so that they get better working environment conditions and the chances of building collapses are eliminated.
• Government of an economy plays an important role and they should contribute positively towards making it sure that the infrastructure levels are efficiently addressed and managed (Harrison, Newholm and Shaw, 2005).

References

Bangladesh: Rana Plaza Victims Urgently Need Assistance, (2014) [Online]. Available at: https://www.hrw.org/news/2014/04/23/bangladesh-rana-plaza-victims-urgently-need-assistance [Accessed: 23 March 2015].

Guido, G. (2009), ‘Behind Ethical Consumption: Purchasing Motives and Marketing Strategies for Organic Food Products, Non-GMOs, Bio-fuels’, Peter Lang.

Gomes, W. (2013). Reason and responsibility: the Rana Plaza collapse [Online]. Available at: https://www.opendemocracy.net/opensecurity/william-gomes/reason-and-responsibility-rana-plaza-collapse [Accessed: 23 March 2015].

Harrison, R., Newholm, T. and Shaw, D. (2005), ‘The Ethical Consumer’, SAGE.

In Bangladesh, Rana Plaza Victims Still Await Compensation, (2013) [Online]. Available at: https://world.time.com/2013/09/16/in-bangladesh-rana-plaza-victims-still-await-compensation/ [Accessed: 23 March 2015].

Tesco Foodwaste, (2014) [Online]. Available at: https://www.tescoplc.com/assets/files/cms/Resources/Food_waste/How_we_calculate_our_food_waste_figure_1.pdf [Accessed: 23 March 2015].

Trading Responsibly, (2014) [Online]. Available at: https://www.tescoplc.com/assets/files/cms/Resources/Trading_Responsibly/Anti_Bribery.pdf [Accessed: 23 March 2015].

Tesco Animal Welfare, (2014) [Online]. Available at: https://www.tescoplc.com/assets/files/cms/Animal_Welfare_1.pdf [Accessed: 23 March 2015].

Trading Responsibly, (2014) [Online]. Available at: https://www.tescoplc.com/assets/files/cms/Resources/Trading_Responsibly/Anti_Bribery.pdf [Accessed: 23 March 2015].

Tesco Resources, (2014) [Online]. Available at: https://www.tescoplc.com/index.asp?pageid=83#ref_society/resources [Accessed: 23 March 2015].