Case 4 - DISNEY: Should Retailers Cut and Run from Bangladesh?
Thursday, May 2, 2013
Western apparel companies have been under tremendous public scrutiny after the fallout of last week’s factory fire in Bangladesh that killed 400 workers. Retailers are torn between staying and improving conditions, and leaving Bangladesh entirely. Bangladesh is the second largest apparel exporter with $18 billion, 3.6 million garment workers, and some of the lowest wages in the world. Wal-Mart, GAP, and Children’s Place met in private recently to discuss improving worker conditions, while Benetton has repeatedly had to revise its explanation of relations to the factory. After a factory fire 6 months ago, ...view middle of the document...
* Bangladesh is one of the lowest wages in the world, therefore many companies have used subcontractors there to lower their cost.
* Unsafe workplace.
* Retailers are deciding to cut and run from Bangladesh because a tremendous scrutiny was held after the factory fire that killed 400 lives.
3. IDENTIFY STAKEHOLDERS
* Bangladesh Workers
* Workers’ family
* outsourcing companies
* business sectors
* Disney and its departments
4. CONSIDER THE AVAILABLE ALTERNATIVES (ADVANTAGES AND DISADVANTAGES)
ALTERNATIVES | ADVANTAGES | DISADVANTAGES |
Stay and Improve conditions (use suppliers that not only provide quality products but also provide a safe and healthy working condition.) | -better working condition-quality products-good company reputation-avoided safety hazards and possible future losses-employee morale | -higher cost of labor and improvements |
Stay and improve conditions (continue to exploit the extremely low labor costs after improvement of the destructions) | -continue to exploit the low cost labor | -stagnant organizational growth in terms of ethics, social awareness, etc.-low employee morale |
cutting their losses and running (walk away and source clothes in another low-cost location) | -will be able to look for other low-cost regions-avoid bigger losses at Bangladesh | -negative image to the public-more people exposed to safety hazards |
5. CONSIDER HOW A DECISION AFFECTS STAKEHOLDERS
ALTERNATIVES | UTILITARIANISM | DEONTOLOGY | JUSTICE & FAIRNESS | ETHICS OF CARE | PERSONAL INTEGRITY |
Stay and Improve conditions (use suppliers that not only provide quality products but also provide a safe and healthy working condition.) | It is for the greater benefits of the company and employees. | The organizations have the obligation to improve the working conditions of Bangladesh. | It would be justice to those employees who deserve a better pay and a safe working...